Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

KING'S CROSS RAILWAYS BILL (By Order)

Order for further consideration, as amended, read.

To be further considered on Thursday 23 January.

Oral Answers to Questions — NATIONAL FINANCE

Privatisation

Mr. Mullin: To ask the Chancellor of the Exchequer what revenue he expects from the proceeds of privatisation for the period of the public expenditure survey.

The Chief Secretary to the Treasury (Mr. David Mellor): Privatisation proceeds are expected to be £8 billion in 1992–93, and £5½ billion in 1993–94 and 1994–95. These are as announced in the Chancellor's autumn statement of 6 November 1991.

Mr. Mullin: What will we live on when the oil revenues have all gone and there is nothing left to privatise? Or will the Chief Secretary and his friends be sunning themselves in some tax haven by that time?

Mr. Mellor: I suspect that we will live on the talents of the British people, which will be greatly assisted by the tax and spending regime—[HON. MEMBERS: "On the backs of the working class."] It is clear how rattled the Labour party is, as it has to start barracking this early in the proceedings. The real question that the hon. Gentleman should put is to his own party: how will it keep tax and spending plans going if it does not have the benefit of privatisation revenues?

Mr. Marlow: Apparently there are some interesting, exciting, progressive, damn fool ideas going around about renationalising the water industry. How much would it cost if fair compensation were paid to the standard rate taxpayer each year if that were to be done?

Mr. Mellor: My hon. Friend touches on an interesting point. The Labour party has become ever so coy about the details of its renationalisation plans. The last time it was asked about them by The Times, the best that it could do was to put up a research assistant to the hon. Member for Dunfermline, East (Mr. Brown) to answer. I think that in due time the British people will want to know a bit more than that.

Mr. Skinner: The Minister asks what Labour will do when it gets the chance to govern. Labour will ensure that

the 3 million people on the pile of human misery known as the dole queue will be given a chance to work and to provide tax and insurance. Then, if I have anything to do with it—[Interruption.]

Mr. Speaker: Order. Give the hon. Gentleman a chance.

Mr. Skinner: We shall take back from the richest 1 per cent. of the population the £26·2 billion that they have had in tax cuts and use it for the national health service, pensioners, schools and all the social services.

Mr. Mellor: I am sure that the hon. Gentleman's application for a job has been noted in the quarters which matter. What the hon. Gentleman must explain away is why, with the reductions in the upper rate of tax which have taken place under this Government, the contribution of higher rate taxpayers as a proportion of income tax is so much higher. It is because a low tax regime is a stimulus to effort, a way of ensuring that the British economy works effectively and that people are put back to work. I do not doubt the hon. Gentleman's aspiration to get people off the dole queue, but I doubt whether he has any policies to achieve that.

Penalty Tax

Mr. Peter Bottomley: To ask the Chancellor of the Exchequer what is the policy of the Inland Revenue in respect of charging penalty tax for a period before retroactive primary legislation is passed.

The Financial Secretary to the Treasury (Mr. Francis Maude): That depends on the provisions of the legislation.

Mr. Bottomley: As the problem which prompted the question has been resolved by the Inland Revenue, will my hon. Friend pass on to its staff the thanks of many Members of Parliament for dealing with issues that we have raised on behalf of our constituents and say that we hope that the problems will continue to decline as tax rates come down rather than go up?

Mr. Maude: On behalf of the Inland Revenue, not always the best loved department of Government, I accept the kind compliments that my hon. Friend has paid to it; I am sure that they will be echoed in all parts of the House. The Inland Revenue does a difficult job in difficult circumstances extremely well.
My hon. Friend is right to make the point that the job of tax collecting is very much easier with a tax system based, as ours increasingly is, on low rates of tax.

Manufacturing Investment

Mr. Jack Thompson: To ask the Chancellor of the Exchequer when he next expects to meet representatives of the CBI to discuss manufacturing investment.

The Chancellor of the Exchequer (Mr. Norman Lamont): I meet representatives from the CBI from time to time to discuss a broad range of issues.

Mr. Thompson: In view of the CBI's projected figure for 1992 of a 4·4 per cent. fall in manufacturing investment, and of the 20 per cent. fall in 1991, is it not time that the Chancellor considered adopting the Labour party's policy on investment?

Mr. Lamont: I am grateful for that suggestion, but I am not sure which Labour party policy the hon. Gentleman is suggesting that I adopt to encourage investment.
One of the most important parts of investment is inward investment into this country, which is very much encouraged by our low rates of tax—by our low rates of corporation tax and by the fact that we have a low higher rate of income of tax. We all know what the Labour party will do to the higher rate, but even it does not seem to know what it will do to the tax on middle managers—national insurance contributions. If Labour Members want to encourage inward investment, they should come clean and clarify in their own minds what their plans for national insurance contributions are.

Sir Ian Stewart: As the future of manufacturing investment depends on confidence in future economic performance, does my right hon. Friend think that anyone contemplating what will happen to his income will feel more confident if he is threatened with slow torture rather than immediate amputation?

Mr. Lamont: My right hon. Friend is absolutely right. The Labour party talks all the time about investment, but the other side of investment is savings. There is no investment without savings. The Labour party's way of encouraging savings seem to be the ingenious one of putting extra taxes on it.

Mr. John Smith: Does the Chancellor appreciate the harm being done to the economy by the 20 per cent. fall in investment in manufacturing industry and the CBI's prediction of a further 4 per cent. fall? Bearing in mind that unemployment is rising yet again, and that 900 companies are going bust every week, when will the Government realise the depth of the recession that their policies have caused and do something to stimulate investment in our manufacturing industry?

Mr. Lamont: I note what the right hon. and learned Gentleman says about investment. As he knows, it has fallen from high levels. Business investment grew by 45 per cent. between 1986 and 1989. He will also know that manufacturing investment actually rose in the third quarter of last year. He will also know that, notwithstanding the CBI's prediction, the latest Central Statistical Office intention survey predicted a 2 per cent. increase in manufacturing investment this year.
The right hon. and learned Gentleman has advanced his idea of how to encourage manufacturing investment. He says that there should be an increased capital allowance for this year, cunningly saying that it would cost nothing in the first year; that is equivalent to saying that the bill is in the post, as we all know that it is paid after 12 months.

Tobacco Goods

Sir John Farr: To ask the Chancellor of the Exchequer what was the total revenue from duty on tobacco goods in 1990.

The Minister of State, Treasury (Mrs. Gillian Shephard): The revenue from duties on tobacco goods in 1990 was £5·5 billion.

Sir John Farr: I thank my hon. Friend for that explicit reply. Does she agree that tobacco companies also contribute a great deal to sport, and that they employ tens

of thousands of people directly and indirectly? Will she send out a message to those who oppose smoking and belong to the brigade who say, "Do as I say and as I instruct you," to the effect that they should leave ordinary people to get on with the job of smoking and supporting the economy?

Mrs. Shephard: I note what my hon. Friend says. At this time of year we receive many such representations, but they must be weighed against the annual death toll of 110,000 people which is associated with smoking. Employment in the tobacco industry, which my hon. Friend mentioned, has been falling steadily due to increased automation and the long-term decline in smoking.

Mr. Radice: While we are on the subject of indirect taxes, will the Government tell the House how they will continue to cut direct taxes and improve public services without at the same time raising VAT as they did in 1979 and in the last Budget?

Mrs. Shephard: I certainly would not like to prejudge what my right hon. Friend the Chancellor might announce in his Budget. It was interesting to read in the Daily Express about Labour's plan for a luxury VAT rate.

Inflation

Mr. Andrew Mitchell: To ask the Chancellor of the Exchequer if he will make a statement about the current level of inflation.

Mr. Andrew MacKay: To ask the Chancellor of the Exchequer if he will make a statement about the current level of inflation.

Mr. Norman Lamont: All-items RPI inflation was 4·3 per cent. in November.

Mr. Mitchell: Does my right hon. Friend agree that increasing expenditure on day one of a new Government while failing to deal with the important issue of taxation is the fastest way back to the high levels of inflation which characterised all Labour Governments?

Mr. Lamont: My hon. Friend is absolutely right. There is nothing wrong with massive increases in public expenditure, provided that the Opposition are open about the fact that they plan massive increases in taxation to finance them.

Mr. MacKay: Does my right hon. Friend agree that it is difficult to take Labour seriously on unemployment when under its policy inflation would rise following increases in public expenditure and our competitiveness in world markets would diminish?

Mr. Lamont: My hon. Friend is absolutely right. Labour does not seem interested in getting inflation down. Indeed, the Leader of the Opposition never even mentioned inflation in his speech at the party conference. Reducing inflation is the absolute first condition for medium-term prosperity. The fight again inflation must go on.

Mr. Graham: While the Chancellor has been concentrating—unsuccessfully—on bringing down inflation, unemployment is raging and further factory closures and redundancies have been announced nearly every week


since he came to office. When will he take steps to reduce interest rates to give some of the companies in Britain an opportunity to survive, fight and compete internationally? Should not the Chancellor hang his head in shame and resign now, and let the Labour party get on with bringing this country back to the richness that it deserves?

Mr. Lamont: I am sure that the hon. Gentleman will welcome the reduction of 3·5 percentage points in interest rates in the past 12 months. I am sure that he also welcomes today's news that the Abbey National, Halifax and Nationwide building, societies are reducing their lending rates to, as they put it, give a fillip to the housing market. I am puzzled by the hon. Gentleman's comment that we are unsuccessful in getting inflation down. At 4·3 per cent., our inflation rate is below the average of the European Community. I hardly dare to mention the 15½ per cent. average rate of inflation under the last Labour Government. Everything that Labour says about public spending shows that it is completely indifferent to inflation, which would have a bad effect on unemployment.

Ms. Armstrong: Will the Chancellor explain why after the 1983 and 1987 elections inflation and other indicators rose significantly but the Government managed to get them down just before those elections? Is that the Government's real policy? What sort of guarantee can the Chancellor give that that sort of thing will not happen again? The only guarantee that I can give is that there will not be a Tory Government after the 1992 election.

Mr. Lamont: Perhaps the hon. Lady will tell me under which of the three Conservative Governments since 1979 the average rate of inflation was remotely near that of the Labour Government from whom we took over.

Mr. Tim Smith: Will my right hon. Friend confirm that the figures for factory output prices, which were published earlier this week, show that the underlying rate of inflation continues to fall? What effect does he expect the very welcome news about mortgage interest rates to have on the retail prices index?

Mr. Lamont: My hon. Friend is drawing attention to an important point about the underlying rate of inflation. We have had some excellent producer prices figures. Excluding the volatile food, drink and tobacco sectors, which are influenced by Budget changes, the rate of inflation has fallen to 3·8 per cent. It is forecast to be 3½ per cent. in the fourth quarter of this year, which will be the lowest figure since 1969. The fact that the underlying rate of inflation is falling so sharply is a very good indicator and is very encouraging for the trend of the headline rate.
As for the second part of my hon. Friend's supplementary question, I cannot anticipate entirely what will happen, but the reduction in mortgage interest rates will obviously have a beneficial effect.

Mrs. Beckett: Does the right hon. Gentleman recall telling the House that a rise in inflation was expected in these months for what he called "technical reasons" shortly after the Prime Minister told the country that the Government had inflation licked? Did the Prime Minister speak in ignorance, or was he trying to keep the British people in ignorance before a possible November election?

Mr. Lamont: As always, the Opposition should quote my right hon. Friend the Prime Minister correctly. My

right hon. Friend said that we had inflation licked in a way that we had not had it licked for years. The trend of inflation is very good. The statistics prove that absolutely, and everybody except the hon. Lady knows it.

Plant and Machinery

Mr. Hayward: To ask the Chancellor of the Exchequer what was total investment in plant and machinery in 1979, 1983, 1987 and 1991.

Mr. Mellor: Measured at constant 1985 prices, plant and machinery investment was £19·7 billion in 1979, £19·4 billion in 1983 and £25·9 billion in 1987. Complete figures for 1991 are not available, but in the first three quarters plant and machinery investment was at an annual rate of £29½ billion, and 52 per cent. above its level in the comparable period of 1979.

Mr. Hayward: It is important that the figures confirm that positive policies are being pursued. Will my right hon. and learned Friend say how we compared internationally in the 1970s and the 1980s?

Mr. Mellor: The figures reveal the full extent of the increase in investment in the 1980s as a result of the Government's policies, an increase which has been maintained even during this period of recession. In absolute levels, we have fallen off only from the historically high 1980 figures. Comparison with other OECD countries is extremely interesting. In the 1970s, the average increase per annum in business investment in the Group of Seven was 3·1 per cent. whereas for the United Kingdom it was 2·3 per cent. In the 1980s, the average increase in the Group of Seven was 4·6 per cent. and in the United Kingdom it was 6·8 per cent.

Mr. Robert Sheldon: Has the right hon. and learned Gentleman not been listening to the chorus of demands from the CBI, from the trade unions and now also from a number of Conservative newspapers for an increase in capital allowances for manufacturing industry? Why does he not take note of that widespread feeling?

Mr. Mellor: We do take note of that feeling. The right hon. Gentleman, who was a Treasury Minister throughout the lifetime of the Labour Government, will appreciate that figures such as those that I have just disclosed to the House would have been regarded as a complete impossibility in his time.

Mr. Budgen: Does my right hon. and learned Friend agree that the level of investment is most of all decided by the real rate of interest? Does he also agree that there has been a noticeable change of opinion in the business community, in that in 1990 it thought that we could go into the exchange rate mechanism without any disadvantage whereas it is now beginning to realise that the ERM obliges us to have a higher exchange rate and higher real interest rates than are appropriate for domestic needs?

Mr. Mellor: I do not know whether my hon. Friend read Gavyn Davies's recent article, which showed that what most greatly influences investment is availability of markets and demand, and that running costs come very much second to those factors. Evidence shows that expected productivity in unit labour costs of British industry are more competitive now than they were when we entered the ERM.

Manufacturing Investment

Mr. Wareing: To ask the Chancellor of the Exchequer what was the increase or decrease in manufacturing investment between 1990 and 1991.

Mr. Norman Lamont: Complete data for 1991 are not available. In the first three quarters, manufacturing investment at constant 1985 prices was 15½ per cent. below its level in the comparable period in 1990.

Mr. Wareing: Does the Chancellor agree that our abysmal economic growth performance since the Government took office in 1979 is due largely to the dismal performance of British manufacturing industry, and that the forecast for the year 1991 of a 15 per cent. fall in investment is a testimony to the failure of the Government's policies? Was it not sheer arrogant complacency for the right hon. Gentleman to tell the National Economic Development Council at its recent meeting that if he had known before that there would be a fall of 15 per cent. he would still have done nothing? Is it not time he retired and let somebody do something?

Mr. Lamont: The hon. Gentleman's question was supposed to be about investment, but he has asked about growth in general. I cannot understand why he referred to poor growth performance in the 1980s unless he thinks that it is poor to have grown faster than France and Germany. That is an extraordinary assumption. He seems unaware that our exports in manufactures have recently been increasing their share of world trade. That cannot be described as a poor performance. The hon. Gentleman should get up to date with his facts.

Sir William Clark: Does my right hon. Friend agree that, although the Opposition seem to delight in talking down the United Kingdom economy, the confidence of the foreigner investing in this country is great and we have the highest rate of inward investment in the EEC, despite the pessimism that the Opposition are always trying to spread?

Mr. Lamont: My right hon. Friend is absolutely right. As he said, inward investment is one of the great success stories of the last decade. We have achieved more inward investment than any other European country. The great thing about that inward investment is that some of the most successful countries in the world have chosen this country in which to invest.

Mr. Beith: Will the Chancellor assist businesses in making their investment plans by telling us whether he has revised his growth forecast for this year in the light of the Prime Minister's statements in his new year interview, which seemed to cast considerable doubt on the growth forecasts given earlier? In the light of what surely must be a changed forecast, will the right hon. Gentleman review his hostility so far to careful public expenditure designed to create infrastructure improvements for the future and to get the economy moving?

Mr. Lamont: I note the hon. Gentleman's early Budget representation. I note that, unlike the Labour party, when the hon. Gentleman's party advocates increased public spending, it is at least honest enough to say that it will put up the basic rate of tax. However, the hon. Gentleman's position does seem a little curious. His party says that it will put up the basic rate of tax. Yet, at the same time, it

said that if there were a coalition Government, it would stop the Labour party putting up the higher rate of tax. That is a curious position to occupy.

Exports

Mr. Pawsey: To ask the Chancellor of the Exchequer if he will make a statement on the trend in United Kingdom export performance over the past five years.

Mr. Mellor: United Kingdom exports have grown 23 per cent. over the past five years, and reached record levels during 1991. I am pleased to say that after decades of decline, the United Kingdom's share of world trade in manufactures flattened out in the mid-1980s, increased in 1989 and 1990, and looks most likely to have increased again in 1991.

Mr. Pawsey: I thank my right hon. and learned Friend for that extremely encouraging response. Does he agree that much of our country's undoubted export success has been due to competitive premium Export Credits Guarantee Department rates? Is he aware that many industrialists are concerned that we shall be unable to maintain our export performance due to uncompetitive rates, particularly vis-à-vis our principal competitors such as Germany, France and Japan? Will my right hon. and learned Friend therefore have a meeting with his opposite number at the Department of Trade and Industry and endeavour to bring ECGD rates down to a level which would be more favourable to British exporters?

Mr. Mellor: We regularly discuss such matters, which I recognise are important, but, as my hon. Friend will appreciate, ECGD premiums must reflect the risk for the taxpayer in export credits. He will be aware that losses by ECGD of £3 billion, which have already been disclosed, with the possibility of a similar sum in the pipeline, suggest that we cannot afford to underestimate the possible losses to the nation if we get the ECGD judgments wrong.
One key way of protecting ourselves in future is to ensure that the premiums charged fully reflect the risks that the country has to take on in allowing such cover to go forward. I acknowledge that we must have an eye to the international experience, and our work internationally is to try to ensure that other countries, too, put up their premiums in a way that sensibly recognises the problems of such cover throughout the world.

Mr. Tom Clarke: If export performance is as impressive as the right hon. and learned Gentleman suggests, when will unemployment levels return at least to those that the Government inherited in 1979?

Mr. Mellor: I have already told the House that the export performance of United Kingdom industry has been extremely good, with an increase of nearly 25 per cent. over five years, and an increase in manufacturing exports even during the past year of recession, in excess of 3 per cent. The question that the hon. Gentleman has to answer is what nostrums put forward by his Front-Bench spokesmen would make such a record possible under a Labour Government.

City Institutions

Mr. Beaumont-Dark: To ask the Chancellor of the Exchequer if he has any plans to meet the Governor of the Bank of England to discuss the City institutions.

Mrs. Gillian Shephard: My right hon. Friend meets the Governor of the Bank of England frequently, and they discuss a wide range of issues.

Mr. Beaumont-Dark: Self-regulation in the City was meant to be a panacea which would solve most existing problems. Since then we have had Polly Peck, Brent Walker, the scandal of the Bank of Credit and Commerce International, and then the greatest scandal of all—the Maxwell scandal. As self-regulation is proving somewhat less than satisfactory, is it not time to consider establishing a Securities and Exchange Commission—an SEC—as exists in America?
The City of London is important to the invisible exports of this country, and we cannot allow scandals such as those that have happened in the past. Under self-regulation people tend to protect one another so that they do not get caught. Let us get things out in the open and have an SEC to ensure that the honour of the City of London is well protected by a statutory authority.

Mrs. Shephard: I hear what my hon. Friend says. We have certainly seen some large and spectacular frauds uncovered recently, although they were not all in financial institutions. Clearly, however, that does not mean that the City is riddled with fraud or that the regulatory system has failed. I am sure that my hon. Friend will agree that no system of regulation can ever give complete protection against a determined thief or fraudster. The Government have done more than any other Government to tighten the regulation of the City, through a series of powerful pieces of legislation. In the end, a balance has to be struck between tight regulation and cramping any sort of innovation or initiative in the financial services sector, as the Labour party would advocate.

Mr. Vaz: Could the Government be prevailed upon to persuade the City institutions to provide more positive assistance for depositors, creditors and former employees of the Bank of Credit and Commerce International? The Minister will know that former depositors will have problems getting facilities for mortgages. She knows, too, that representations have been made to the Chancellor of the Exchequer. Could the City institutions be made positively to assist people who, through no fault of theirs, have lost a considerable amount of money?

Mrs. Shephard: The hon. Gentleman will wish to know that that point is being pursued. He will also be aware that arrangements are in place for the liquidators to aid banks in their assessment of applications made by small businesses and personal customers for alternative facilities.

Sir Peter Tapsell: May I support what my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) has just said in urging the Government to give serious consideration to the establishment of a Securities and Exchange Commission in Britain. Is it not clear that the multiplicity of often overlapping self-regulating authorities are not adequately protecting the national interest? Will my hon. Friend the Minister bear it in mind

that many of the frauds that have come to the attention of our regulating authorities were first discovered and reported to them by the American SEC?

Mrs. Shephard: Of course, that was not so in the case of BCCI. I repeat to my hon. Friend that, while there is cause for concern about the large spectacular frauds that have been uncovered, the Government have done more than any other with the Financial Services Act 1986, the Banking Act 1987, the Building Societies Act 1986 and amendments to the Companies Acts to regulate the City of London.

Mr. Salmond: In discussions with the Governor of the Bank of England on City institutions will the Chancellor discuss how to circumvent the damage done to hopes to locate the Eurobank in the United Kingdom by the Government's opt-out policy on the single currency? Will he further discuss whether it would be better to argue for Edinburgh as a location for the bank—a location much more acceptable to other Europeans than London, which the Labour and Tory Front-Bench teams have argued for?

Mrs. Shephard: No decision needs to be taken for some time on the location of the European central bank. The Government have made it clear that a decision on the site would be premature at this stage. Whatever happens, the Government will do what they can to advance the case of the most credible United Kingdom candidate.

Inward Investment

Mr. Hind: To ask the Chancellor of the Exchequer what assessment he has made of the likely impact of the Maastricht agreement on future inward investment into the United Kingdom.

Mr. David Nicholson: To ask the Chancellor of the Exchequer what assessment he has made of the likely impact of the Maastricht agreement on future inward investment into the United Kingdom.

Mrs. Gillian Shephard: We expect to continue our excellent record in attracting inward investment. Latest available estimates are that between 1984 and 1988 the United Kingdom received about one third of all inward direct investment to the EC—higher than any other member state.

Mr. Hind: My right hon. Friend the Chancellor of the Exchequer said that the success of inward investment depends on availability of markets. In my hon. Friend the Minister's view, what would be the effect on the economy and inward investment if she abolished the ceiling on national insurance, increased the ordinary rate and basic rate of tax for a third of the population in the south-east and introduced a higher rate of value added tax on luxury products—all measures proposed by the Labour party?

Mrs. Shephard: The attraction of the United Kingdom to inward investment is the skilled labour force, low unit costs compared with other EC countries and, of course, the competitive tax system with the lowest rate of corporation tax in industrialised countries. I fear that many of those features would be threatened by the policies of the Labour party.

Mr. David Nicholson: The effects of the Maastricht agreement will be extremely beneficial for inward


investment into Britain, but does my hon. Friend not agree that all the paraphernalia that would be inflicted on industry by a Labour Government would be disastrous for inward investment? Will she also emphasise that we are building on success and, to this end, will she give the House the figures for 1988, 1989 and 1990 on the proportion of American and Japanese investment in the EC which came to Britain?

Mrs. Shephard: In 1988–89, 62 per cent. of all United States inward investment in the EC came to the United Kingdom and 42 per cent. of all Japanese direct investment in the EC came to the United Kingdom.

Mr. Enright: If the Minister is so keen on inward investment, why are she and her hon. Friends blocking the inward investment that would come from RECHARbonisation?

Mrs. Shephard: For a moment, I rather wondered if the hon. Gentleman was following in the footsteps of his colleagues in the trade union movement who regard inward investment as an alien culture. Perhaps I might say that the problems with RECHAR, the Government consider, are entirely in the court of the European Commission.

Mr. Chris Smith: For every £1 of inward investment that might conceivably be attracted by inadequate employment conditions and inadequate rights for employees, are there not £2 or £3 of inward investment that will be deterred by the absence of any positive contribution from Britain to the growing economic and monetary integration of Europe? Is not the greatest threat to inward investment the uncertainty that the Government have deliberately created by their opt-out on a single currency?

Mrs. Shephard: As I said before, the key factors in the determining foreign investment are a stable economic environment, a commitment to a free and open market and a lack of intrusive social and industrial regulation. The United Kingdom's right to decide for itself on the merits of a single currency is not an important factor in investment decisions.

Employee Share Ownership Trusts

Mr. Ian Taylor: To ask the Chancellor of the Exchequer whether he has had any recent representations about ways of encouraging wider utilisation of qualifying employee share ownership trusts.

Mr. Maude: I have received a small number of such representations, from my hon. Friend the Member for Esher (Mr. Taylor) among others.

Mr. Taylor: Despite the considerable progress that has been made under this Government in encouraging employee share ownership, will the Minister take careful note of the recent KPMG Management Consulting report which shows ways in which the qualifying employee-share option trusts can be made more flexible and therefore likely to be more widely used by companies and available to more employees in subsequent years of Conservative government?

Mr. Maude: I have seen the report and am considering its implications carefully, but it is just worth pointing out

that in 11 of the past 12 Budgets we have taken steps to encourage employee share ownership to the extent that by the end of March last year about 2·25 million employees had benefited under all employee share schemes and had received options or shares with an initial value of £6·5 billion. It is a highly desirable development and we hope to see it continued.

Mr. Nicholas Brown: Does the Minister recall that when we discussed these matters during the passage of the Finance Bill the then Financial Secretary, now Chancellor of the Exchequer, expressed passionate enthusiasm for workers' control? In the light of that enthusiasm is the present Financial Secretary able to tell us how many employee share ownership trusts have been set up under the statutory provisions?

Mr. Maude: As I said, by the end of March 1990, 2·25 million employees had received shares or options under approved share schemes. Employee share ownership trusts are a relatively small part of the Government's provision of tax relief for employee share ownership, but it would be very nice to hear the hon. Member for Newcastle upon Tyne, East (Mr. Brown) express on behalf of the Labour Front Bench wholehearted enthusiasm for what we believe in, which is giving employees in companies real ownership of the companies that they work for.

National Interest

Mr. Michael: To ask the Chancellor of the Exchequer what account he takes of the national interest in terms of the viability of businesses and the retention of jobs in deciding on the exercise of the functions of his Department in respect of Inland Revenue responsibilities.

Mr. Maude: The first duty of the Inland Revenue is to collect tax which is properly due. It aims to treat all taxpayers with equal fairness and to settle their tax affairs impartially.

Mr. Michael: Does the Minister recognise that that is a highly bureaucratic response? Given the way that business is suffering under the policies and decisions of this Government, and especially the policies of the Prime Minister, does the Minister recognise that he has a responsibility to ask his officials to deal with businesses in such a way as to enable them, wherever possible, to retain jobs and to keep their businesses going? Will he also accept that this should be his personal responsibility? Will he accept it before the House?

Mr. Maude: The hon. Member for Cardiff, South and Penarth (Mr. Michael) described my response as "bureaucratic". It is not a bureaucratic response at all; it simply expresses the statutory duty placed on the Inland Revenue by the House—that is, the duty to collect tax which is properly due. But the Inland Revenue does not pursue that in a blind and dogmatic way. If tax is owing and payment on the due date is impossible, the Inland Revenue will discuss payment over a period of time to meet the liability; and any taxpayer who is in difficulty in paying his or her tax should contact the Inland Revenue at the earliest opportunity to discuss how the difficulty might be resolved.

Drugs

Mr. Tony Banks: To ask the Chancellor of the Exchequer what quantities of drugs have been seized by Her Majesty's Customs and Excise in each of the last three years.

Mrs. Gillian Shephard: The information is as follows: in 1989, 50,935 kilos of cannabis were seized, in 1990, 24,896 and in 1991 21,796 kilos; in 1989, 337 kilos of heroin were seized, with 576 kilos in 1990 and 357 in 1991; 409 kilos of cocaine were seized in 1989, 561 kilos in 1990 and 1,061 in 1991.

Mr. Banks: Obviously Customs and Excise must be congratulated on its vigilance. However, is it not time to consider the possibility of legalising soft drugs, especially cannabis? After all, cannabis does much less harm to a person's health than nicotine, and yet cigarettes are legal. It is the criminal activity surrounding the supply of illegal drugs that we should really worry about. If we were to legalise soft drugs, that would no longer be a problem.

Mrs. Shephard: I am delighted that the hon. Gentleman congratulated Customs and Excise. I remind him that its task is to enforce the law. Would it be the policy of the Labour party to legalise those drugs?

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Winnick: To ask the Prime Minister if he will list his official engagements for Thursday 16 January.

The Prime Minister (Mr. John Major): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Winnick: In view of the evidence given yesterday should there not be a full and frank ministerial statement—which should come from the Prime Minister—of what was known inside the Government at the time about the supergun affair? Bearing in mind the number of military items sold to the Iraqi regime by this country right up to the invasion of Kuwait and the highly critical comments made about the conduct of Ministers during the Gulf war, what right do the Government have to lecture hon. Members on the Opposition Benches over defence matters?

The Prime Minister: In so far as the Gulf war is concerned, the hon. Gentleman is referring to one of the most successful military operations ever undertaken by this country or any other. It achieved its objectives more swiftly and with less bloodshed than anyone could possibly have imagined. As to the earlier part of the hon. Gentleman's question, he knows that much of what he said was nonsense. It has been dealt with often enough.

Mr. McGrady: To ask the Prime Minister if lie will list his official engagements for Thursday 16 January.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. McCrady: Could I remind the Prime Minister that one of the consequences of his Maastricht agreement is to

prevent Northern Ireland from participating in the new cohesion fund, to the extent of losing tens of millions of pounds? I am sure that he is aware of the total lack of adequate funding for roads, transport and the environment in Northern Ireland, especially now that the Secretary of State has imposed a total moratorium on all public spending in Northern Ireland. Would he assure the people of Northern Ireland and the House that as soon as possible he will remedy that appalling error, and allow Northern Ireland to benefit from the new cohesion fund as a category 1 area?

The Prime Minister: There is, as the hon. Gentleman knows, a higher level of public expenditure per head of population in Northern Ireland—and rightly so—than anywhere else in the United Kingdom. The establishment of the cohesion fund and eligibility to benefit from it were agreed by all the member states. There is a misapprehension that Northern Ireland is the only category 1 area that will not benefit from that, but that fund is designed to help the poorest member states, not poorer regions or provinces within the more prosperous nations. So, the hon. Gentleman does not understand the purpose for which the fund was devised.

Mr. Gwilym Jones: To ask the Prime Minister if he will list his official engagements for Thursday 16 January.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Jones: Will my right hon. Friend assure the House that he has no plans to increase income tax and national insurance contributions for millions of ordinary tax-payers? Does he agree that it is the height of irresponsibility to try to pretend that there can be a massive increase in spending from day one of a Government if the tax increases to pay for that are to be phased in?

The Prime Minister: I can also confirm to my hon. Friend that we have made no plans for a super increase in VAT, as the Opposition have apparently considered. There is no doubt that the Opposition are now in a shambles over their tax plans. Their muddled statements show that they cannot be trusted on tax; they shift their position from day to day. The only thing that is certain is that a party that promises to spend and spend is a party that would have to tax and tax.

Mr. Kinnock: Will the Prime Minister tell us why his record on unemployment is even worse than that of his predecessor?

The Prime Minister: Everyone in the House and beyond regrets the fact that unemployment rises. That is why we are persisting with policies that will create long-term, permanent jobs for the future. We have put those policies in place—low inflation, lower taxes and lower interest rates. Those are the only measures that will get people into work and keep them in work, which is the only proper policy to follow.

Mr. Kinnock: Unemployment has risen by nearly 1 million in the time that the hon. Gentleman has been Chancellor and Prime Minister, but still he refuses to do anything useful to stop that remorseless rise. Is it not because he believes that 2·5 million unemployed is "a price worth paying"?

The Prime Minister: The right hon. Gentleman should not be so cheap over such a problem. Unemployment is greater than a year ago in every country in EFTA and in every G7 country except the Netherlands. French unemployment is at its greatest level ever. United States unemployment is higher than for the past five years. What the right hon. Gentleman might also have fastened his mind upon is the fact that reported job vacancies are rising, that the number of people placed in jobs is rising and that there are 500,000 more people in work than in 1979. Those are some of the facts which the right hon. Gentleman should absorb.

Mr. Kinnock: The right hon. Gentleman is a dodger.[Interruption.]

Mr. Speaker: Order.

Mr. Kinnock: In the last year employment in Britain went down by 873,000. Job vacancies are still 10,000 lower than they were this time last year. When Sir Nicholas Goodison of the Trustee Savings Bank says that this is the worst recession in living memory, is it any wonder that the whole country knows that this is the Government of high unemployment?

The Prime Minister: Some people might say that on policy rather than on personal matters the right hon. Gentleman is a tax dodger. He can give no lecture to us on unemployment. [HON. MEMBERS: "Withdraw."] His policies would cut jobs across the whole country.

Hon. Members: Withdraw.

Mr. Speaker: Order. I do not think that that was meant in a personal sense.

The Prime Minister: Indeed; I expressly said that, Mr. Speaker. The right hon. Gentleman's minimum wage would increase unemployment by putting 2 million people out of work. His plans to slash defence budgets by £6 billion would cost 100,000 more their jobs. His tax on jobs would cost another 100,000. He is the only person in opposition to plan for greater unemployment as a matter of policy.

Mr. Nicholls: Will my right hon. Friend confirm that if the upper earnings limit on national insurance contributions—[Interruption.]

Mr. Speaker: Order. I ask the House to settle down.

Mr. Nicholls: Will my right hon. Friend confirm that if the upper earnings limit on national insurance contributions were to be removed, it would punish not just somebody earning £20,280 a year but would punish anyone who earned £390 in a single week? Does he agree that a proposal that would impose a massive tax burden on 4 million ordinary people could be produced only by a shower such as those who currently comprise the Opposition?

The Prime Minister: My hon. Friend is quite right—[Interruption.]

Mr. Speaker: Order. The House is in a very excited state.

The Prime Minister: My hon. Friend is right. I suspect that the Labour party simply did not understand when it drew up its policy that everyone would pay more national

insurance contributions in a single week if they earned above one fifty second of statutory UEL. The Independent pointed out, for example, that the Opposition's tax plans would mean
the largest ever peacetime tax increase.
The Leader of the Opposition promised explicitly that anyone earning less than £21,000 a year would not pay a penny tax extra in income tax or national insurance under a Labour Government. Clearly, he was wrong about that. He should admit it, and do so publicly.

Mr. Canavan: To ask the Prime Minister if he will list his official engagements for Thursday 16 January.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Canavan: Will the Prime Minister confirm that he personally was informed about British Steel's decision to close Ravenscraig over a fortnight before the official announcement last week—[HON. MEMBERS: "Oh?"]—and that instead of trying to reverse the decision, he and the Secretary of State for Scotland took part in a conspiracy of silence? Will the right hon. Gentleman now, even at this late stage, intervene to try to stop the closure, bearing in mind the Government's responsibility for privatising the steel industry, thereby allowing a butcher such as Bob Scholey to betray the Scottish steel workers?

The Prime Minister: It is noticeable that the Labour party has not offered to keep Ravenscraig open. I was informed that British Steel would be making a decision on the day that it made the decision—[Interruption.] I was informed in confidence some days before that it would be making a decision on that day. It was a commercial decision by British Steel. It is clear, despite all their words, that Opposition Members would have done nothing different.

Mr. Irvine: Does my right hon. Friend agree that defence cuts of £6 billion would lead to a massive loss of jobs in defence industries throughout the country? Does he further agree about the hypocrisy of those who call on the one hand for the maintenance of defence contracts in public and, on the other, plan in private for defence reductions?

The Prime Minister: My hon. Friend makes a good point. Our policy, both for nuclear and conventional defence, is clear, has been set out in a number of documents and is properly costed. The Opposition do not say where they stand, cannot say where they stand and cannot admit to the jobs that would be lost if their policy were carried out. The Labour party conference has three times voted to cut £6 billion from the defence budget, and we can see the extent to which that would devastate the defence industry and the defence of this country.

Mr. Madden: To ask the Prime Minister if he will list his official engagements for Thursday 16 January.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Madden: Might I ask the right hon. Gentleman a question about which I gave notice to his office earlier this morning? Will he arrange for X-ray and metal detection equipment to be installed immediately at Armley prison in Leeds? I ask for this following a serious breach of security at the prison last Friday, when a visitor inside the prison


drew a knife and sought to attack another visitor. As this is the latest in a series of serious breaches of security at prisons, will the Prime Minister call upon the Home Secretary, who has clearly lost control of his own Department and no longer enjoys the confidence of the public, to resign now or else sack him?

The Prime Minister: First, I am grateful to the hon. Gentleman for giving me notice of the detailed point that he wished to raise.
Security at prisons holding category A prisoners is already very tight, with rigorous searching procedures. In addition, however, we are providing X-ray equipment, as the hon. Gentleman has suggested we should. A contract has been placed for the supply of this equipment to prisons that hold category A prisoners. Devices have to be specially constructed, and they will be delivered as soon as possible.
In reply to the hon. Gentleman's last point, I can say that I have complete confidence in my right hon. Friend the Home Secretary.

Mr. Evennett: To ask the Prime Minister if he will list his official engagements for Thursday 16 January.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Evennett: Does my right hon. Friend agree that to base defence policy on defence cuts—the North Sea oil of the 1990s—is irresponsible and misguided? Is my right hon. Friend aware that the Opposition Front-Bench spokesman on Treasury affairs has actually stated this as a belief—

Mr. Speaker: Order. The hon. Gentleman must ask a question about Government policy.

Mr. Evennett: Will my right hon. Friend confirm that Labour remains unsound on defence?

The Prime Minister: Yes, it is clear that, as my hon. Friend says, Labour would cut the defence budget to ribbons. It is true that on defence Labour cannot be trusted. [ Interruption.]

Mr. Speaker: Order. Will the Prime Minister please answer the matters for which he has responsibility?

The Prime Minister: I am seeking to do precisely that.
It is perfectly clear that, while the defence of this country is the first priority of the present Government, it might not be the first priority of the Opposition if they were to make the defence cuts to which they have committed themselves.

Business of the House

Dr. John Cunningham: Will the Leader of the House please tell us the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): The business for next week will be as follows:

MONDAY 20 JANUARY—Second Reading of the Local Government Bill [Lords]
Proceedings on the Stamp Duty (Temporary Provisions) Bill
TUESDAY 21 JANUARY—Remaining stages of the Asylum Bill.
WEDNESDAY 22 JANUARY—There will be a debate on a motion to approve the Chancellor of the Exchequer's autumn statement.
Motion on the Housing Support Grant (Scotland) Order.
Motion on the Revenue Support Grant (Scotland) Order.
THURSDAY 23 JANUARY—Opposition day (3rd allotted day). Until about seven o'clock there will be a debate described as "The Growing Incidence of Poverty" followed by a debate described as "The Government's Failures over Ravenscraig". Both debates arise on Opposition motions.
FRIDAY 24 JANUARY—Private Members' Bills.
MONDAY 27 JANUARY—Motions on the Electricity (Northern Ireland) Order and the Electricity (Northern Ireland Consequential Amendments) Order.

Dr. Cunningham: First, I welcome the announcement that there is to be a debate on the Chancellor's autumn statement. Will the Chancellor, as is usual, take the opportunity to announce the date of the Budget—a matter that, this year, is of more than passing interest to hon. Members and to people in the country? May we have an assurance that when the debate is held next week it will be in order for hon. Members to discuss the Government's proposals on, for example, VAT? Will the Chancellor make it clear what he intends to do in the coming months about VAT?
During the debate on the autumn statement, will the Chancellor finally say whether, given the appalling rise in unemployment, which continues—indeed, the rate of increase is now worse than that in almost any other country in the western world, and certainly the worst in Europe—he still believes that that is a price worth paying? Is it not clear that, every week the Prime Minister stays in Downing street, several thousand of our fellow citizens lose their jobs?
Can the Leader of the House tell us when he intends to bring forward the revenue support grant orders for England and Wales? People throughout England and Wales are anxious to know exactly what the Tory poll tax will cost them and their families this year; and of course local authorities, which have the responsibility of trying to administer this fiasco and are now apparently recording more than 7 million cases waiting to go before the courts because of the inadequacy of this legislation bounced through the House, are also anxious to know what is in the revenue support grant orders.
Why have the Government been so reluctant to discuss the implications for Scotland of the closure of the

Ravenscraig steelworks? We had to force Ministers to the Dispatch Box on Monday because the Secretary of State refused to make a statement on a matter of such vital importance to Scotland. The Government refused to provide time for a debate. The people of Scotland will not have missed these points and they will know that it is only because the Opposition are providing time on a Supply day that we shall have the opportunity to discuss the implications of the closure for employment and jobs in Scotland.

Mr. MacGregor: On the first point, I am certainly delighted that we are to debate the autumn statement next week, when it will be possible for us to put forward yet again in considerable detail the Government's spending programmes and the high priorities that we attach to all sorts of key areas, such as law and order, transport, defence, education and housing. It will also be possible to restate that these public expenditure plans are contained and are affordable within existing tax regimes.
That is the answer to the hon. Gentleman's point about VAT. The charge that he makes on VAT ignores completely the fact that the main increase in VAT took place in the early years of this Government in order to deal with the very substantial fiscal deficit that we inherited.
The debate will also enable us to probe the Opposition's spending and tax policies, because it seems that they fluctuate day by day. There is total confusion and a huge gap between spending commitments and the tax proposals to fund them. We look forward to hearing the Opposition make their position clear in the debate next week.
With regard to the Budget date, I do not think that the hon. Gentleman is quite right in saying that it is usual for it to be given in the autumn statement. Indeed, it was not done in that way last year. But we shall make clear the date of the Budget at the appropriate time.
On the question of the revenue support grant orders, the hon. Gentleman knows that the position on revenue support grants has been made clear in other statements. However, I agree that it is important to have the orders, and I hope to be able to make a statement about a debate on the orders in my next business statement.
The Government were absolutely clear about the position on Ravenscraig and announced straight away their intention to set up an enterprise zone, so we shall be able to talk next week about the effects of that in creating new jobs in the area. I believe that what the whole House, the country and, in particular, the people of Lanarkshire and Scotland will want to know much more clearly than has been spelled out so far is exactly what the Labour party's position is on the Ravenscraig issue.

Several Hon. Members: rose——

Mr. Speaker: Order. May I say that, despite the temptation to initiate an election campaign on the Floor of the House, the object of business questions is to ask about the business for next week. I therefore urge hon. Members to confine their questions to next week's business, bearing in mind that we have an important debate today for which there are no fewer than 16 groups of amendments.

Mr. Michael Jopling: Does my right hon. Friend recognise that there is a new and urgent need for a debate next week on defence? Does


he understand that, despite the debate earlier this week, new uncertainties have emerged? They are illustrated in early-day motions 474 and 487.
[That this House recognises that the defence of the realm and the maintenance of international order through alliances are the prime duties of Government; notes the collapse of the Soviet Empire and the instability and uncertainty in many different areas of the world; welcomes Her Majesty's Government's determination to retain a viable and independent nuclear deterrent through the Trident programme and to provide balanced and fully equipped conventional forces; and regrets that the commitment of 130 honourable Members, over half of the Parliamentary Labour Party to CND, and of their Party Conference to massive cuts in conventional armaments, makes it impossible for the official Opposition to sustain a credible defence policy.]
Many people, especially shipyard workers in Barrow, are utterly bewildered by the Opposition's defence policy. It has been made absolutely clear that many members of the shadow Cabinet and defence committee say one thing but believe another.

Mr. MacGregor: My right hon. Friend is absolutely right. That seems to be happening not only in defence: the Labour party seems to be saying one thing one day and another the next. It was made clear in the defence debate this week that many members on the Opposition Front Bench, as well as all the officers of the Opposition Back-Bench committee, subscribe to unilateral nuclear disarmament. My right hon. Friend is right to say that exactly what the Labour party's is on the fourth Trident still needs to be clarified, because it ducked that question completely last week.
I cannot promise my hon. Friend a debate on defence next week. We have debated it this week, but as we have received such unsatisfactory answers this week and the Government's position is clear, I am sure that we shall return to it before long.

Mr. James Wallace: Does the Leader of the House agree that a debate compromising a review of the present arrangements for the government of Scotland and any proposals that the Government wish to put forward to improve them, the proposals for a Scottish constitutional convention and a review of Scotland's relationship with Europe would provide a full and comprehensive agenda reflecting all views on the Scottish constitutional debate, and would fit the great debate called for by the Secretary of State? Will he table an appropriate motion next week to enable the Scottish Grand Committee to debate those important items?

Mr. MacGregor: My right hon. Friend the Secretary of State for Scotland has suggested that those issues could be debated in the Scottish Grand Committee. I believe that that would be useful, because some aspects of the proposals that have been put forward, not least on the Scottish convention, bear a great deal of scrutiny and the real choices have not been put forward. I shall discuss with my right hon. Friend whether it would be right for me to arrange a debate next week, as the hon. Gentleman suggests.

Mr. John Marshall: Will my right hon. Friend arrange for an early debate on the future of grant-maintained schools? Is he aware that Hendon

school, in my constituency, was under-subscribed when it was under the control of the local authority but is now over-subscribed? He may remember his visit to that school 18 months ago.

Mr. MacGregor: I do recall that visit, and I remember the great enthusiasm with which the governors, head teacher and staff were embarking on grant-maintained status. I also noted the way in which parents have responded. My hon. Friend is right because many grant-maintained schools already have a high degree of support. I cannot promise a debate next week, but I am sure that there will be opportunities to debate the matter in the coming months.

Mr. Harry Barnes: May we have a debate on early-day motion 458?
[That this House is deeply concerned that (a) in October 1991, the Inspectorate of Pollution issued an improvement notice plus additional requirements upon Coal Products Ltd., Avenue Works, Wingerworth, Derbyshire, arising from problems of airborne pollution, (b) in November 1991, the North East Derbyshire District Council rejected a planning application for the installation of a plant for the regeneration of active carbon on the same site and (c) in December 1991, the National Rivers Authority issued a report showing that following partial treatment at lagoons in a country park, 40 million gallons of toxic effluent is seeping into the ground near homes at nearby Grassmoor; and calls upon the Secretary of State for the Environment to undertake an urgent environmental audit of the plant and its neighbouring communities with an immediate project of protecting the health and well-being of both the workforce at Coal Products Ltd. and residents in the surrounding communities, whilst seeking ways and means of safeguarding jobs in an area of high unemployment.]
A serious problem has emerged in the area over a period of months, and a series of reports have been issued, concluding with a report by the National Rivers Authority on effluent that is poured into the lagoons at Grassmoor—40,000 tonnes of it a year. The problem with trying to investigate such matters without an overall consideration by the Department of the Environment is that people are shunted between different authorities, such as the pollution inspectorate, the county councils, the district councils and the health authorities. A drawing together of all those authorities is required, as well as a debate that would have some significance to environmental development generally.

Mr. MacGregor: I am happy to have debates at the appropriate time. We have recently debated environmental questions generally. As the hon. Gentleman knows, the Government recently produced a progress report on the first year following the White Paper which shows, on a wide variety of fronts, considerable progress on environmental matters.
On the hon. Gentleman's specific point relating to the early-day motion, Coal Products Ltd., like any other company, is governed by strict environmental regulations introduced by this Government. I cannot, however, promise the hon. Gentleman a debate next week on the specific issue that he raises.

Mr. Phillip Oppenheim: May we have a debate on junk mail as soon as possible, to discuss a mailshot sent to many of my constituents by an


organisation that is partly funded by Maxwell money which is so full of falsehoods that it would make the average time-share salesman blush; which redefines the term "junk mail" and peddles dodgy, old-fashioned and out-of-date remedies which have been banned in most countries and which have passed their sell-by date; and which bears the signature of an obscure Welsh politician, best known for losing his rag with Zimbabwean soldiers and for nutting people in public lavatories?

Mr. MacGregor: I have not seen the leaflet to which my hon. Friend refers, so I do not know the details. I cannot promise a debate on it next week, but perhaps he will find his own opportunities to discuss it in greater detail.

Mr. Dave Nellist: Will the Leader of the House arrange for an early statement from the Lord Chancellor on the workings of the Civil Evidence Act 1968 following the collapse yesterday in Liverpool and Gravesham of several hundred poll tax cases because the Government have so far refused to introduce a commencement order to allow computer evidence to be used in the magistrates court under that Act? I drew that fact to the attention of magistrates—albeit unsuccessfully—in my cases in Coventry and Wandsworth. What option do the Government now have? If they do not introduce the commencement order, will they tell every council that there must be a council officer with personal knowledge of all the billing arrangements of every individual who is brought before the courts? There are millions of outstanding cases. If the Government do introduce the order, will that not mean that the 5 million liability orders already granted and the 200 imprisonments that have already been made are illegal? Surely all poll tax cases should be stopped until the matter has been sorted out.

Mr. MacGregor: The Government are urgently considering whether there is any need to change the law governing proceedings in the magistrates court to deal with problems in the effective presentation of evidence in community charge enforcement cases. However, there is no bar on the institution of enforcement proceedings by local authorities where evidence of non-payment can be brought before the court, and proceedings continue to be brought successfully in many other areas.
Nothing that has happened in the recent cases provides any reason whatsoever for people who are liable to pay the community charge failing to do so. There is strong feeling among those who do pay the community charge about those who should pay but are not paying. There are exemptions and benefits for people on low incomes. There is very strong feeling about this issue and, although the Government are urgently considering the matter that has recently arisen, the vast majority of people expect those who are supposed to pay the community charge to do so.

Mr. Roger King: Will the Leader of the House find time next week to debate the issue covered in today's editorial in The Birmingham Post entitled "So much for 'Buy British"? The editorial deals with the Opposition's topic of encouraging people to buy British and points out that the Opposition's deputy leader has just bought a foreign car. Should we not, in

conjunction with the very misleading Labour party political broadcast, call to account those who advocate buying home-produced goods but then buy foreign ones?

Mr. MacGregor: My hon. Friend makes a good point and I think that it would be legitimate to raise it during the debate next week on the motion to approve the autumn statement, when I hope it will be pointed out that that party political broadcast was a gross travesty of the facts of British manufacturing industry. It was also a clear attempt to talk Britain down.
My right hon. Friend the Secretary of State for Trade and Industry has written to the Leader of the Opposition drawing attention to the many ways in which it was a gross distortion and to the fact that, for example, one in 10 personal computers sold in the world—let alone in this country—is now made in Scotland and that no less than 85 per cent. of the kitchens sold in this country are made by British firms. The highly selective description of individual items in a kitchen which was contained in the broadcast did no credit to British manufacturing or to the enormous improvement that it has made, and it was a gross distortion of the facts.

Mr. Merlyn Rees: Will the Leader of the House bear in mind the fact that there has been no debate on Northern Ireland for a long time? There are 10,000 British soldiers in Northern Ireland. We are debating everything else in advance of the general election but not Northern Ireland, so will he answer two questions? First, are talks taking place? I am advised that the press says that they are but that in practice they are not. Secondly, is it true that, in order to maintain a parliamentary majority, the Anglo-Irish Agreement will be ditched?

Mr. MacGregor: As the right hon. Gentleman will know, there will be a full day's debate on one aspect of Northern Ireland—not the talks, but electricity—a week on Monday. We do debate Northern Ireland matters frequently.
My right hon. Friend the Secretary of State for Northern Ireland has expressed the view that, unless the outstanding issues are resolved in the near future, it is unlikely that political talks could begin before the election because of a lack of time; but the Government very much hope that the obstacles will be overcome and that the talks can then begin.
I can confirm that stories about meetings at the party-political level are pure invention.

Mr. Richard Tracey: Will my right hon. Friend confirm that, in the debate on the autumn statement, it will be within the rules of order to constrast Government spending policies with the extravagant spending policies of the Opposition and to mention the taxes that will be necessary to pay for them? My right hon. Friend will agree that there is great anxiety about higher taxation and increased national insurance contributions. Surely it is right that the House should be able to question the shadow Chancellor of the Exchequer about his apparent differences of opinion with his hon. Friend the Member for Derby, South (Mrs. Beckett).

Mr. MacGregor: I am sure that, subject to Mr. Speaker's ruling, it will be in order to discuss these matters—I know that they have been raised in previous autumn statement debates. The country will certainly be looking to


the Opposition to clarify their position on taxation and spending. It seems as if the Opposition flounder almost every day in their responses to the charges and questions that we put to them, and I very much hope that they will clarify their position on national insurance charges on high and not so high incomes—and on whether any increases will be phased in. If so, we should be told how they will meet their spending commitments on child benefit and pensions. These are legitimate issues on which it would be perfectly in order for the House to spend a good deal of time next week.

Mrs. Margaret Ewing: Will it be possible for the Lord President of the Council to ask the Department of Transport to make a statement or to initiate an early debate on the proposed review of coastguard services, a matter of serious concern to all of us who represent maritime constituencies? Fears have been raised about a reduction in manpower, and we should like to explore the matter further.

Mr. MacGregor: I do not think it will be possible to have a debate in Government time, but I shall discuss the matter with my right hon. and learned Friend.

Mr. Robert G. Hughes: Can my right hon. Friend arrange a debate on local government finance in London, so that we may discuss the growing evidence that Labour councils, far from struggling to provide services, cannot even be bothered to collect millions of pounds of rates and of community charge still owing to them? These councils do not collect their rents and have lost control of their rented housing stock. In short, they do not want to provide services; they just want to blame the Government.

Mr. MacGregor: My hon. Friend draws attention to the fact that there is considerable maladministration among Labour councils, as witness the discovery of what went on in the council of Brent when it was under Labour control. I should think that it would be in order to discuss these matters when we debate the revenue support grant orders for England.

Mt. Geoffrey Lofthouse: Is the right hon. Gentleman aware that there is great concern in the mining industry because, in the midst of important negotiations between British Coal, National Power and PowerGen on the future contracts on which mining depends, British Coal's commercial director, Mr. Malcolm Edwards, has been sacked? Given that it is only a few months since the Secretary of State appointed him under a two-year contract, will the Leader of the House arrange for the Secretary of State to make a statement to the House next week on the matter?

Mr. MacGregor: We had a full debate on the coal industry yesterday, as the hon. Gentleman knows. I will raise the point with my right hon. Friend, but 1 doubt whether a statement next week would be appropriate.

Mr. Stephen Day: Will my right hon. Friend find time next week to allow the House to debate health, specifically the recently published report which shows the great success of GP fund-holding practices and trust hospitals? Could the debate be held in Government time to allow us to congratulate the people who work in those facilities and the GPs who are now strongly supporting the

reforms? A debate might allow the Opposition the opportunity to withdraw some of their more outrageous allegations about those reforms.

Mr. MacGregor: As my hon. Friend will have seen in the recent report on the first six months of the NHS reforms, substantial progress is being made by the NHS backed by our reforms and the record resources that we are making available. The report also shows that the NHS is treating more patients than ever before and placing much more emphasis on quality of services. I join my hon. Friend in paying tribute to all the staff in the health service. The report clearly shows that Opposition warnings about what would happen after the reforms have proved to be completely false. I would welcome a debate, but in the next few weeks many issues have to be fitted into the timetable, not least progress on Government legislation. I shall look for an opportunity for a debate, but I cannot promise one next week.

Mr. Greville Janner: May we have an early debate on the Government's determination to prevent part-timers from having the same rights as people who work full time? is the right hon. Gentleman aware that in Leicester almost a third of all women workers and almost 20 per cent. of all workers are part-timers? It is disgraceful that they should be refused even the residual rights that the Government have left for those who work full time.

Mr. MacGregor: I am also aware that the Opposition's proposal for a national minimum wage would destroy many part-time jobs.

Mr. Harry Greenway: Will my right hon. Friend arrange for an early debate next week on the principle and number of live animal exports which, we hear, have reached record levels in the past year? Does he accept that the conditions in which live animals are exported must be humane? There is considerable doubt sometimes about whether live animals are exported in humane conditions and a debate is urgently required.

Mr. MacGregor: I am sure that my hon. Friend welcomes the steps taken by my right hon. Friend the Minister of Agriculture, Fisheries and Food in the Agriculture Council on this matter, especially in relation to the export of live horses. I cannot promise a debate in the near future, but no doubt my hon. Friend will find opportunities to raise the matter further.

Mr. Dennis Skinner: Is the Leader of the House aware that, in the past four days, since we returned from the Christmas recess, I have heard more from Conservative Members about Labour party policy than I have heard on the national executive committee in 12 months? Will he listen to the pleas of those who have occupied the Waterloo ambulance station, using it for 70 homeless people who in a blaze of publicity over Christmas were helped by the Government? Now they need food. By whatever means possible, will the right hon. Gentleman get in touch with Ministers to ensure that, if it is right for the Government to gain publicity over Christmas for looking after a few hundred homeless, it should be right to do something about them now so that they are not turned out on the streets?

Mr. MacGregor: I shall look into the hon. Gentleman's second point. On his first point, I am grateful to him for his confession. Now we know why Labour policies are in such a mess.

Mr. Bob Dunn: Will my right hon. Friend consider rearranging next week's business to enable us to have an urgent debate on industrial relations, bearing in mind that our reforms over the past 12 years have brought industrial relations to a new level of success? The number of days lost through strikes is lower than at any time since 1979, and people ought to know that Labour policies would sweep all that away and bring back the sort of industrial anarchy that existed in 1978–79.

Mr. MacGregor: My hon. Friend is certainly right about the number of days lost through strikes. The figures announced today for the most recent month are the best for a long time and continue the trend of recent months. They are certainly better than 1979. In terms of the Government's general strategy on economic policy matters, it would be appropriate for some of those issues to be raised in Wednesday's debate.

Mr. Roy Beggs: Is the Leader of the House aware that the seventh report of the Public Accounts Committee on the privatisation of Harland and Wolff was not available to Members in the House until late yesterday evening and that it had been made available to others some time previously? That enabled the Belfast Telegraph, for example, to carry a huge article on the real cost of the sell-off. Northern Ireland Members were disadvantaged because they did not have the information and could not comment. Will the right hon. Gentleman ensure that this sort of thing does not happen again?
As we are to have a debate on the Electricity (Northern Ireland) Order, will the right hon. Gentleman seek to have the report of the Select Committee on Energy on the privatisation of the electricity industry in Northern Ireland available to us before the debate takes place?

Mr. MacGregor: I shall have to look into the second matter. There is a need for a debate on the privatisation of the electricity industry in Northern Ireland fairly soon.
I shall look into the availability of the PAC report. I am not clear about what was made available in the report last night and what was published in newspapers earlier. I shall write to the hon. Gentleman.

Mr. Andrew MacKay: Is my right hon. Friend aware that it is important that we have a debate soon on Kashmir, especially bearing in mind that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), in his capacity as deputy leader of the Labour party, has pledged his party to support self-determination for Kashmir? Many of my right hon. and hon. Friends take a more measured view, which I think would be much appreciated by our many Indian constituents.

Mr. MacGregor: I shall make the Government's position clear on Kashmir yet again. We believe that the dispute can be resolved only by peaceful agreement between India and Pakistan. That remains the best way to proceed. We have offered help if both sides want us to intervene. What the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said is a matter for him.

Mrs. Ray Mitchie: Yesterday we heard a statement on environmentally sensitive areas in

England. I think that it is generally agreed that a positive way forward is to have a partnership between farming and environmental interests. As the Scottish islands await progress on the matter, can the Leader of the House tell us whether the Secretary of State for Scotland will make a statement early next week on ESAs for Scotland?

Mr. MacGregor: I am grateful to the hon. Lady for her support in general for the policy. I entirely agree with her in that respect. The early experience of ESAs that I had when I was Minister for Agriculture, Fisheries and Food showed the policy to be important, helpful and constructive. As for a statement on ESAs in Scotland, I shall have to raise the matter with my right hon. Friend the Secretary of State for Scotland, which I shall do.

Mr. Ian Bruce: Has my right hon. Friend had a chance to read early-day motion 316, which stands in my name and is supported by about 40 right hon. and hon. Members?
[That this House is appalled at the mistreatment and murder of street children in Guatemala; and calls on President Serrano and the Guatemalan Government to urgently deal with this problem and in particular to support the work of the Casa Alianza and other agencies working to bring education and support to these children.]
It is alleged that the street children of Guatemala City are being killed by police officers and others. My right hon. Friend may know that one of my constituents, Bruce Harris, is in charge of the mission called Casa Alianza. Even he has been threatened with death. May we have an early debate on foreign affairs and aid and on the encouragement that should be given to President Serrano, who now says that he is keen to see the problem sorted out? The United Kingdom's full attention should be focused on the problems in Guatemala City.

Mr. MacGregor: I am grateful to my hon. Friend for raising the matter. I have read the early-day motion, and the Government share the concern that is expressed in it. We and our European partners have made clear to the Guatemalan Government the importance that we attach to human rights, and expecially to the rights of street children. I do not know when it will be possible to have a general debate on foreign affairs, but I shall bear in mind what my hon. Friend has said. If we have such a debate, it will be possible for him to raise this matter, as he will be able to do on other occasions.

Mr. Thomas Graham: Obviously I welcome the opportunity to debate next week Ravenscraig and the Lanarkshire economy. I hope, however, that it has not escaped the attention of the Leader of the House that one of the most famous companies in Scotland, Armitage Shanks of Barrhead, is facing closure because of the parent company's axe. May we be given the opportunity to debate the economy of Renfrewshire, which has suffered 35,000 job losses since the Government came to power? As I have said, we are facing the closure of a world-famous company in Scotland. The Government are not lifting a finger to help the economy of Renfrewshire. They are not investigating why the company wishes to move from Barrhead. Why is it that the Government do not want to debate what is happening in Renfrewshire? We have only their failed policies and an enterprise zone in Inverclyde. They are not doing anywhere near enough for Scotland. Do something now.

Mr. MacGregor: I was sorry to hear about the possibility of job losses at the company concerned, and I recognise the company's creditable history. However, this is a matter for the company. As the hon. Gentleman will know, the Government have done a great deal to assist the Scottish economy. There have been particular measures in north Lanarkshire, but the matter goes way beyond that. It is the Opposition's choice to confine next week's debate to Ravenscraig and north Lanarkshire.

Mr. Geoffrey Dickens: Does my right hon. Friend agree that high taxation is poor for inward investment and many other things? Will he assure us that next week's debate will be far-reaching enough for us to explain that in the early days of the Conservative Government—1979 and 1980—we had to repay massive debts incurred by the previous Labour Government and that since then we have religiously cut taxation? So, for high taxes vote for the Labour party. and for low taxes vote Conservative.

Mr. MacGregor: I am glad that my hon. Friend made that point; he is right. I hope that there will be plenty of opportunity to debate those matters next week. [Laughter.] The hon. Member for Copeland (Dr. Cunningham) is laughing. He knows that the country now recognises that his party has been, is and always will be a party of high taxation, because it cannot resist spending other people's money. If the hon. Member for Copeland is complaining about the level of tax now, the country wants to know why he proposes to add considerably to it.

Mr. Tam Dalyell: As it was tabled. on 17 December, has the Leader of the House had time to reflect on early-day motion 424 in the name of a former Law Officer, a former Home Secretary, myself and 41 colleagues?
[That this House welcomes the public announcement by Her Majesty's Government of the identity of the new head of MI5; but calls on Her Majesty's Government to make a full statement about the role of Stella Rimington, in particular in connection with the activities of Mr. David Hart during the 1984 miners' strike.]
It welcomes the public announcement of the identity of the new head of MI5, but calls on the Government to make a full statement about Stella Rimington's role, particularly as it related to the activities of Mr. David Hart, during the 1984 strike. Also, as the first signatory of the motion, may I say that since it was tabled statements have been made to me about the involvement of Stella Rimington and Mr. Roger Windsor of the National Union of Mineworkers. The motion raises serious issues and calls for some sort of response.

Mr. MacGregor: As the hon. Gentleman knows, following the passage of the Security Service Act 1989, the Government judged that it was right to announce the appointment of a new director general of the Security Service and I am pleased that that has, rightly, been seen as a positive step. The hon. Gentleman asked about the new director general designate's previous work. It has been the long-standing practice under Governments of both parties not to comment on operational matters, and we do not intend to depart from that precedent.

Mr. John Browne: Does my right hon. Friend accept that, although nominal interest rates are falling, real interest rates are rising, causing even normally

prudent businesses to fail, with increased job losses and mortgage foreclosures? Is it not economic nonsense that our interest rates should be dictated not by our own grave economic needs but by the interests of the German economy? In the absence of a revaluation of the deutschmark within the exchange rate mechanism, will my right hon. Friend accept that many of us are deeply concerned about our continued membership? Will he please grant an urgent debate on the specific subject of the exchange rate mechanism?

Mr. MacGregor: No. We have debated the exchange rate mechanism and general economic policy on many occasions and it will be possible to refer to that issue in the debate on Wednesday. I would not wish to have a debate on only the ERM because many other matters need to be raised. On the general principle, I believe that the vast majority of my hon. Friends are strongly in favour of the benefits that the United Kingdom economy and British business have received as a result of our membership of the ERM.
My hon. Friend will note that German interest rates and ours are closer than they have been for a long time. I am sure that he will also welcome the reduction in mortgage rates announced by the Abbey National today.

Mr. Charles Kennedy: Will the Leader of the House arrange for the Secretary of State for Scotland to make a statement next week on his handling of the planning process within Scotland in advance of the proposed local inquiry into the construction of a bridge to Skye? In a written answer this week, the Secretary of State for Scotland has confirmed that, in advance of the local inquiry, he and the Scottish Office have entered into a commercial contract with the designated builders of the project. That makes nonsense of the planning procedure and adds to the difficulties of the local objectors, which already include the 9 kg of paper produced by the roads directorate in Scotland, so that no proper analysis or preparation of arguments can be done in advance. Will the right hon. Gentleman examine the handling of the process? It is certainly undemocratic, and many people are beginning to feel that it borders on the unconstitutional.

Mr. MacGregor: I cannot comment on the details, and I certainly cannot promise a statement next week. We have much important business to conduct, so I doubt whether a statement will be possible, but I shall draw the hon. Gentleman's remarks to the attention of my right hon. Friend the Secretary of State for Scotland.

Mr. Patrick Nicholls: Could my right hon. Friend find time for a short debate on the question of Short money? Does he agree that events this week have shown that there may be inadequacies in the funding of Opposition parties? If we can examine the matter in detail, might we be able to find sufficient research funds for the Leader of the Opposition to be able to check the quotations that he uses against the Prime Minister before misquoting them? Might it not also be possible to find the right hon. Gentleman a researcher who can at least draft a simple apology?

Mr. MacGregor: I do not think that that was a failure of finance; it was simply a failure to understand the issues and to do homework.

Mr. Bob Cryer: Will the Leader of the House take into account early-day motion 452?
[That this House calls for publication of the Register of Members' Secretaries and Research Assistants; notes that the Register includes information on, amongst others provided with access passes, the proprietor of private psychiatric nursing and residential homes, employees of political and economic consultancies, international law firms, company directors, representatives of parliamentary lobbying organisations (including Research and Information Services, Westminster Ltd., Chelgate Public Relations Ltd., Taylor Steingberg Associates, Westminster Communications, Decision Makers Ltd., Charles Barker Public Affairs and others), a parliamentary researcher for parliamentary agents, a Lloyds underwriter and the Managing Director of Charles Barker Watney and Powell; and urges the Leader of the House to place a Motion on the Order Paper to facilitate publication so that the public may be aware of who has such privileged access, and why.]
The motion calls for the publication of the Register of Members' Secretaries and Research Assistants, and asks specifically that something be done about the business of the House—that is, that a motion should be put on the Order Paper to ensure that the register is published, as it contains an astounding cross-section of commercial lobbying organisations. The managing director of one of the biggest of such organisations attached to this place is registered as a Member's secretary or research assistant.
Is it not true that some hon. Members are receiving perks in return for providing passes and conferring advantages on commercial lobbying organisations? Should not that information be open to the public instead of being kept in the Library? Then people outside could know who was being registered and who was getting the passes, and hon. Members could explain the reasons, which may be perfectly valid, why the passes have been given.

Mr. MacGregor: I should not wish to comment on the hon. Gentleman's allegations, but, on his general point, it would not be appropriate to deal with the issue by publishing the Register of Members' Secretaries and Research Assistants. The right way to proceed may be to consider the matter when the House debates—as I hope we shall in due course, when we can find time—the Select Committee on Members' Interests report on parliamentary lobbying, which has now been published.

Mr. Andrew Mitchell: Is my right hon. Friend certain that he has allocated sufficient time for next Wednesday's debate on the Chancellor's autumn statement to allow the House fully to ventilate the Opposition's extraordinary shambles on taxation? I ask that in the light of the interview given on the "World at One" today by the shadow Chancellor to Mr. James Naughtie, in which the right hon. and learned Gentleman was fully and effectively "kebabbed"—I believe that that is the word. Will my right hon. Friend tell the House whether he has ever known an Opposition in such a state of panic and disorder over such an important issue so soon before a general election?

Mr. MacGregor: We have been saying for a long time that there is a huge gulf between the spending promises that the Labour party has lavished on just about every interest group and its tax commitments. It now appears that the Labour party is reneging on some of those tax

commitments, so my hon. Friend is right to draw attention to the issue. I am sure that the subject will feature in next week's debate. I cannot promise him any extended time next week, or another day next week, but we shall return to the matter again—by which time, no doubt, the Labour party's position will have changed yet again.

Mr. D. N. Campbell-Savours: The attacks of the Leader of the House on my party are boring the public to tears. If he does not believe me, he should trawl public opinion. People are getting switched off by all this nonsense.
May I ask the Leader of the House a question and receive a straight answer, not an attack on the Labour party? May we have a debate on business services and, in particular, export credit guarantee premiums? Is he aware that companies throughout Britain, and indeed several in my constituency, say that they are losing business and large contracts abroad because they cannot afford the premiums? Will the right hon. Gentleman look into the matter? Can it be debated in Parliament?

Mr. MacGregor: The hon. Gentleman is wrong on the first point. I get a different reaction as I go round the country: I find that there is a great deal of interest. The Labour party would not apparently hint that it will change its position on national insurance contributions unless it was not greatly worried about the reaction that the public are already showing. The hon. Gentleman is wholly wrong about that. [Interruption.] I am not surprised that the hon. Gentleman is so sensitive on the matter. We are finding such reactions all the time.
The hon. Gentleman's point about export credit insurance could be raised in next Wednesday's debate because it is an economic matter and the debate is on the economy and the autumn statement.

Mr. Kenneth Hind: Will my right hon. Friend find time, possibly next week, for a debate on unemployment in the north of England? We constantly hear in the House attacks on the Government's employment policy. My right hon. Friend will have noticed that in today's figures unemployment levels in the north-west—in Merseyside, Lancashire and Cheshire—are well over 20 per cent. lower than when the Government were last elected. Perhaps that is one point that should be pushed home hard to the electorate in the north of England.

Mr. MacGregor: My hon. Friend makes a good point. I think that it would be in order for him to make it in the debate next Wednesday, if he catches your eye, Mr. Speaker.

Mr. James Maxton: May I raise a specific point about the debate on the Revenue Support Grant (Scotland) Order next Wednesday? Is the Leader of the House aware that that order is not listed today among the Remaining Orders of the Day and Notices of Motions? Is he aware that I have been informed that the order will not be laid until tomorrow and that it is not available at present in the Vote Office? That means that Scottish Members can obtain the order at the earliest tomorrow. They cannot get back in time to discuss it with their local authorities tomorrow afternoon.
There is to be an important debate which relates to Scotland in the House on Monday evening. That leaves about one hour between 9 am and 10 am on Monday


morning for Scottish Members to discuss the Revenue Support Grant (Scotland) Order with their local authority officials and representatives. That is a complete negation of democracy. I ask the Leader of the House even at this stage to withdraw the debate on the order next week and to put it on in the following week when we have had time to discuss it.

Mr. MacGregor: There is a general desire that we should debate the Revenue Support Grant (Scotland) Order. I hope that the House will pass it so that local authorities may know exactly where they stand and are in a position to move forward. I am under the impression that that is generally agreed. I shall look into the point that the hon. Gentleman raises immediately after business questions.

Mr. Jeff Rooker: In view of the belated but welcome interest in the House in occupational pensions, may I draw the right hon. Gentleman's attention to early-day motion 131?
[That this House regrets that the Occupational Pensions Board has approved the request of Lucas Industries plc to remove £90 million from the employees' pension fund for company use causing a further payment from the fund to the Inland Revenue of £60 million so depleting the pension fund by £150 million; notes that the 35,000 Lucas pensioners do not receive the maximum pensions allowed by the Inland Revenue; is mindful that the company has made no payments into the pension fund for six years; and believes a first call on any surplus in the pension fund should be to existing pensioners up to the maximum allowed.]
It deals with the raiding by Lucas Industries of £90 million from the funds of 35,000 pensioners when it had not paid a penny into the pension fund for six years. British Rail pensioners are unable to be represented as pensioners on the board of trustees of the pension fund.
May we have a debate on early-day motion 131 and the activities of the Occupational Pensions Board, which must rate as one of the least effective guardians of the public interest that the House has ever set up? A debate is long overdue. Millions of occupational pensioners in Britain are worried sick about the future and the stability of their pensions because they have read about disasters and of pension funds being raided. I might add that those pension funds were raided apparently with the official sanction of the Occupational Pensions Board. We need to have the matter opened up on a much wider front rather than merely having fishing expeditions on one incident.

Mr. MacGregor: I cannot promise a debate on the matter next week, but I am told that the Occupational Pensions Board was asked by Lucas to approve a modification of its scheme rules so that the scheme could benefit from a reduced tax liability. As well as transferring funds to the company, the modification also provides a significant package of benefit improvements, totalling £225 million, for scheme members. That is what I am informed as a result of seeing the early-day motion.

BALLOT FOR NOTICES OF MOTIONS FOR MONDAY 3 FEBRUARY

Members successful in the ballot were:

Sir Michael Neubert
Mr. Jacques Arnold
Dame Jill Knight

Orders of the Day — Competition and Service (Utilities) Bill

As amended (in the Standing Committee), considered.

New Clause 12

PRELIMINARY INVESTIGATION OF DISPUTES BY GAS CONSUMERS' COUNCIL

' . The following section shall be inserted in the Gas Act 1986, after section 32—

"Preliminary investigation by Council of certain disputes.

32A.—(1) This section applies where—

(a) representations are made to the Council by or on behalf of a person who appears to the Council to have an interest in the matter to which the representations relate; and
(b) that matter appears to the Council to constitute a dispute of a kind which may be referred to the Director under section 14A above or 33A below, or under regulations made under section 15A above.

(2) It shall be the duty of the Council—

(a) to inform the person by or on whose behalf the representations are made that he may have the right to refer his dispute to the Director; and
(b) to make such investigations with respect to the matter to which the representations relate as may be specified in a direction given by the Director.

(3) Any such direction may be given so as to apply generally or to a specified class of matter or particular matter and may, in particular, specify in relation to any investigation which the Council is required to make under this section—

(a) the practice and procedure which it is to follow in conducting its investigation; and
(b) the information which it is to give to the Director with respect to the matter investigated.".'.—[Mr. Redwood.]

Brought up, and read the First time.

The Minister for Corporate Affairs (Mr. John Redwood): I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to discuss the following:

New clause 24—the Gas Consumers' Council—
'In section 2 of the Gas Act 1986 (the Gas Consumers' Council), the following subsection shall be inserted after subsection (3)
(3A) In appointing members for the Council, the Secretary of State shall have regard to the desirability of appointing persons who have experience in or knowledge of activities connected with the supply of gas through pipes.".'.

New clause 25—Gas Act 1986 (Investigations by Director)—
'—(1) Section 31 of the Gas Act (duty of Director to investigate certain matters) shall be amended as follows.

(2)For paragraph (b) in subsection (1), there shall be substituted
is referred to him by the Council under subsection (6G) of section 32 below.''

(3) Subsection (2) shall cease to have effect:'.

New clause 26—Gas Act 1986 (Investigation by Council)—

'(1) Section 32 of the Gas Act (duty of Council to investigate certain matters) shall be amended as follows.

(2) For paragraph (a) in subsection (2), there shall be substituted—
(a) any matter in respect of which any functions of the Director under this Part are or may be exercisable; and

(3) For paragraph (b) in subsection (2), there shall be substituted—
(b) any matter which relates to the supply of gas through pipes and in respect of which any functions of the Director General of Fair Trading under the Fair Trading Act 1973 or the Competition Act 1980 are or may be exercisable.

(4) In subsection (3), for "paragraph (a) of subsection (2) above" there shall be substituted "subsection (2) of section 33 below".

(5) The followng subsections shall be inserted after subsection (6)—

"(6A) Where under an investigation under subsection (1) above any matter appears to the Council to be an enforcement matter the Council may prepare a written report on that matter and shall (subject to section 42 below) send a copy of any such report to—

(a) any person to whom the report refers or who (whether or not he has made a representation to the Council) appears to the Council to have an interest in the matter to which the report relates;
(b) the Director General of Fair Trading or any person whose functions under any enactment appear to the Council to be exercisable in relation to that matter;
(c) any person who appears to the Council to be a person who ought to take account of the report in determining how to act in relation to that matter;
(d) the Director.

(6B) In reporting the matter under subsection (6A), the Council may recommend—

(a) that he matter be reconsidered by the public gas supplier concerned;
(b) that the Director consider exercising any of his functions under section 28 above.

(6C) More than one recommendation may be included in a report under this section.

(6D) Where the Council includes any recommendation in a report under this section, the report shall give the Council's reasons for making the recommendation.

(6E) Where—

(a) a report is sent to any public gas supplier under subsection (6A) above; and
(b) the report includes a recommendation directed to that supplier,
the shall have regard to it and notify the Council of the action which he has taken, or proposes to take, to comply with the recommendation.

(6F) Where a public gas supplier fails to comply (whether wholly or partly) with a recommendation under subsection (6B) above the Council shall refer the matter to the Director."

(6) Subsection (7) shall cease to have effect.'.

New Clause 27—Gas Act 1986 (Duty to advise Director)—

—(1) Section 40 of the Gas Act 1986 (general duty to advise Director shall be amended as follows.

(2) After the words "advise the" there shall be inserted "Secretary of State or, as the case may be, the".

(3) In paragraph (a) after the words "any of the" there shall be inserted "Secretary of State's or, as the case may be, the".

(4) In paragraph (b) after the words "by the" there shall be inserted "Secretary of State of the".'.

New clause 28—Gas Act 1986 (Annual Reports)—

'—(1) Section 41 of the Gas Act 1986 (annual reports) shall be amended as follows.

(2) In subsection (2) after the words "advised the" there shall be inserted "Secretary of State or the".'.

New clause 29—Gas Act 1986 (Information)—

'The following section shall be inserted in the Gas Act 1986, after section 41—

Information.

41A The Director shall give information collected by or furnished to him under section 38C above to the Council, with a view to facilitating the exercise of the Council's functions under this Part.".'.

New Clause 30—Electricity Act 1989 (Consumers' Council)—

'For section 1 of the Electricity Act 1989 there shall be substituted—

The Electricity Consumers' Council.

2. (1) There shall be a body corporate to be known as the Electricity Consumers' Council (in this Part referred to as 'the Council') for the purpose of performing the functions assigned to it by this Part.

(2) The Council shall consist of a chairman and such other members as the Secretary of State may from time to time appoint.

(3) In appointing members for the Council, the Secretary of State shall so far as practicable, ensure—

(a) that the members of the Council include members who, by reason of their familiarity with the special requirements and circumstances of the different areas of Great Britain or of small businesses, are able together to represent the interests of consumers of electricity supplied to premises in all those areas and such businesses; and
(b) that the interests of consumers of electricity supplied to premises in different areas are represented by different members wherever that appears to the Secretary of State to be appropriate having regard to the manner in which the various parts of the electricity supply industry in Great Britain organise themselves.

(4) In appointing members of the Council, the Secretary of State shall have regard to the desirability of appointing persons who have experience in or knowledge of activities connected with the supply of electricity to premises.

(5) A member of the Council shall hold and vacate office in accordance with the terms of the instrument appointing him and shall, on ceasing to hold office, be eligible for re-appointment.

(6) The provisions of Schedule X to this Act shall effect with respect to the Council.".'.

New Clause 31—Electricity Act 1989 (information by Director)—

'The following section shall be inserted in the Electricity Act 1989, after section 42

"42A. The Director shall give information collected by or furnished to him under section 42 above to the Council, with a view to facilitating the exercise of the Council's functions under this Part.".'.

New clause 32—Electricity Act 1989 (investigation of enforcement matters)—

'For section 45 of the Electricity Act 1989 (investigation of enforcement matters) there shall be inserted—

"45.—(1) It shall be the duty of the Director to investigate any matter which appears to him to be an enforcement matter and which—

(a) is the subject of a representation (other than one appearing to the Director to be frivolous) made to the Director by or on behalf of a person appearing to the Director to have an interest in that matter; or


(b) is referred to him by the Council under subsection ( ) of section 46 below.

(2) in this section and section 46 below "enforcement matter" means any matter in respect of which any functions of the Director under section 25 above are or may be exercisable.".'.

New Clause 33—Electricity Act 1989 (investigation of certain matters)—
'For section 46 of the Electricity Act 1989 (investigation of certain other matters) there shall be substituted—

"46.—(1) It shall be the duty of the Council to investigate any matter which to which subsection (2) below applies and which—

(a) is the subject of a representation (other than one appearing to the Council to be frivolous) made to the Council by or on behalf of a person appearing to the Council to have an interest in that matter; or
(b) is referred to it by the Director under subsection (11) below.

(2) This subsection applies to—

(a) any matter in respect of which any functions of the Director under this Part are or may be exercisable;
(b) any matter (other than an enforcement matter) which relates to the supply of electricity to premises. and
(c) any matter which relates to the supply of electricity and in respect of which any functions of the Director General of Fair Trading under the Fair Trading Act 1973 or the Competition Act 1980 are or may be exercisable.

(3) Subject to subsection (4) below, it shall be the duty of the Director to refer to the Council any matter which appears to the Director to be a matter (other than an enforcement matter) falling within paragraph (b) of subsection (2) above and which is the subject of a representation (other than one appearing to the Director to be frivolous) made to the Director by or on behalf of a person appearing to the Director to have an interest in that matter.

(4) Nothing in subsection (3) above shall require the Director to refer to the Council any matter in respect of which he is already considering exercising functions under this Part.

(5) Where on an investigation under subsection (1) above any matter appears to the Council to be a matter falling within subsection (2) above in respect of which it would be appropriate for the Director General of Fair Trading to exercise any functions under this Part, the Council shall refer that matter to the Director with a view to his exercising those functions with respect to that matter.

(6) Where under an investigation under subsection (1) above any matter appears to the Council to be an enforcement matter the Council may prepare a written report on that matter and shall (subject to section 57 below) send a copy of any such report to—

(a) any person to whom the report refers or who (whether or not he has made a representation to the Council) appears to the Council to have an interest in the matter to which the report relates;
the Director General of Fair Trading or any person whose functions under any enactment appear to the Council to be exercisable in relation to that matter;
(c) any person who appears to the Council to be a person who ought to take account of the report in determining how to act in relation to that matter;
(d) the Director.

(7) In reporting on a matter under subsection (6), the Council may recommend—

(a) that the matter be reconsidered by the electricity supplier concerned;
(b) that the Director consider exercising any of his functions under this Part.

(8) More than one recommendation may be included in a report under this section.

(9) Where the Council includes any recommendation in a report under this section, the report shall give the Council's reasons for making the recommendation.

(10) Where—

(a) a report is sent to any electricity supplier under subsection (6) above; and
(b) the report includes a recommendation directed to that supplier,
he shall have regard to it and notify the Council of the action which he has taken, or proposes to take, to comply with the recommendation.

(11) Where an electricity supplier fails to comply (whether wholly or partly) with a recommendation under subsection (7) above the Council shall refer the matter to the Director.".'.

New clause 34—Electricity Act 1989 (functions of director)—
'In section 47 of the Electricity Act 1989 (general functions of Director) subsection (4) shall cease to have effect.'.

New clause 35—Electricity Act 1984 (duty of consumers' council to advise Director)—

'For section 51 of the Electricity Act 1989 (general duty of consumers' committees to advise director etc.) there shall be substituted—.

"It shall be the duty of the Council to keep under review matters affecting the interests of consumers of electricity supplied to premises and to advise the Secretary of State, or as the case may be, the Director on any matter which—

(a) appears to it to affect the interests of consumers or potential consumers of electricity; and
(b) is referred to it by the Secretary of State or the Director or is a matter on which it considers it should offer advice.".'.

New clause 36—Electricity Act 1989 (reports of consumers' committees)—

'For section 52 of the Electricity Act 1989 (periodical and other reports of consumers' committees) there shall be substituted—

"52.—(1) The Council shall, as soon as practicable after the end of each calendar year, make to the Director and to the Secretary of State a report on its activities during that year.

(2) Each report shall include a statement of the matters on which, during the year to which it relates, the Council has advised the Secretary of State or the Director under section X above.

(3) The Council shall arrange for every such report to be published in such a manner as it considers appropriate.

(4) In making any such report, the Council shall have regard to the need for excluding, so far as that is practicable—

(a) any matter which relates to the affairs of an individual where the publication of that matter would or might in the opinion of the Council, seriously and prejudicially affect the interests of that individual; and
(b) any matter which relates specifically to the affairs of a particular body of persons, whether corporate or unincorporate, where publication of that matter would or might, in the opinion of the Council, seriously and prejudicially affect the interests of that body.".'.

New clause 37—Electricity Act 1989 (National Consumers' Consultative Council)—
'Section 53 of the Electricity Act 1989 (the National Consumers' Consultative Committee) shall cease to have effect.'.

New clause 38—Electricity Act 1989 (Abolition of Consumers' Council)—

'In section 54 of the Electricity Act 1989 (abolition of Consumers' etc. Councils) the following paragraphs shall be inserted after paragraph (c)—

"(d) the consumers' councils established under this Act; and

(e) the National Consumers' Consultative Committee.".'.

New clause 39—Electricity Act 1984 (Schedule 2)—
'Schedule 2 of the Electricity Act 1989 shall cease to have effect.'.

New clause 40—Telecommunications Act 1984 (investigation of complaints)—
'In section 49 of the Telecommunications Act 1984 (investigation of complaints) the following paragraph shall be inserted in subsection (1) after paragraph (b)—
;or
(c) is referred to him by the Council under subsection (ii) of section 54D below.".'.

New clause 41—Telecommunications Act 1984 (Telecommunications' Consumers Council)—

'For section 54 of the Telecommunications Act 1984 there shall be substituted

The Telecommunications Consumers' Council.

54.—(1) There shall be a body corporate to be known as the Telecommunications Consumers' Council (in this Part referred to as 'the Council') for the purpose of performing the functions assigned to it by this Part.

(2) The Council shall consist of a chairman and such other members as the Secretary of State may from time to time appoint.

(3) In appointing members for the Council, the Secretary of State shall so far as practicable, ensure—

(a) that the members of the Council include members who, by reason of their familiarity with the special requirements and circumstances of the different areas of Great Britain or of small businesses, are able together to represent the interests of consumers of telecommunication services in all those areas and such businesses; and
(b) that the interests of consumers of telecommunication services in different areas are represented by different members wherever that appears to the Secretary of State to be appropriate having regard to the manner in which the various parts of the telecommunication services in Great Britain organise themselves.

(4) In appointing members for the Council, the Secretary of State shall have regard to the desirability of appointing persons who have experience in or knowledge of activities connected with telecommunication services.

(5) A member of the Council shall hold and vacate office in accordance with the terms of the instrument appointing him and shall, on ceasing to hold office, be eligible for re-appointment.

(6) The provisions of Schedule X to this Act shall have effect with respect to the Council.".'.

New clause 42—Telecommunications Act 1984 (duty of Council)—
'The following section shall be inserted in the Telecommunications Act 1984, after section 54—

Duty of the Council

54A.—It shall be the duty of the Council to keep under review matters affecting the interests of consumers of telecommunication services and to advise the Secretary of State, or as the case may be, the Director on any matter which——

(a) appears to it to affect the interests of consumers or potential consumers of telecommunication services; and
(b) is referred to it by the Secretary of State or the Director or is a matter on which it considers it should offer advice.".'.

New clause 43—Telecommunications Act 1984 (annual and other reports)—
'The following section shall be inserted in the Telecommunications Act 1984, after section 54A—

Annual and other reports

54B.—(1) The Council shall, as soon as practicable after the end of each calendar year, make to the Director and to the Secretary of State a report on its activities during that year.

(2) Each report shall include a statement of the matters on which, during the year to which it relates, the Council has advised the Secretary of State or the Director under section 54A above.

(3) The Council shall arrange for every such report to be published in such a manner as it considers appropriate.

(4) In making any such report, the Council shall have regard to the need for excluding, so far as that is practicable—

(a) any matter which relates to the affairs of an individual where the publication of that matter would or might in the opinion of the Council, seriously and prejudicially affect the interests of that individual; and
(b) any matter which relates specifically to the affairs of a particular body of persons, whether corporate or unincorporate, where publication of that matter would or might, in the opinion of the Council, seriously and prejudicially affect the interests of that body.".'.

New clause 44—Telecommunications Act 1984 (information by Director)—
'The following section shall be inserted in the Telecommunications Act 1984, after section 54B—

Information to be furnished by the Director

54C.—The Director shall give information collected by or furnished to him under section 27C above to the Council, with a view to facilitating the exercise of the Council's functions under this Part.".'.

New clause 45—Telecommunications Act 1984 (Investigation of complaints by Council)—
'The following section shall be inserted in the Telecommunications Act 1984, after section 54C—

Investigation of complaints by the Council.

54D.—(1) It shall be the duty of the Council to investigate any matter to which subsection (2) below applies and which is the subject of a representation (other than one appearing to the Council to be frivolous) made to the Council by or on behalf of a person appearing to the Council to have an interest in that matter.

(2) This subsection applies to—

(a) any matter in respect of which any functions of the Director under this Part are or may be exercisable;
(b) any matter which relates to telecommunication services provided or telecommunication apparatus supplied in the United Kingdom; and
(c) any matter which relates to the supply of telecommunications and in respect of which any functions of the Director General of Fair Trading under the Fair Trading Act 1973 or the Competition Act 1980 are or may be exercisable.

(3) Where on an investigation under subsection (I) above any matter appears to the Council to be a matter falling within subsection (2) above in respect of which it would be appropriate for the Director General of Fair Trading to exercise any functions under this Part, the Council shall refer that matter to the Director with a view to his exercising those functions with respect to that matter.

(4) Where under an investigation under subsection (I) above any matter appears to the Council to be a matter falling within paragraph (a) of subsection (2) above the Council may prepare a written report on that matter and shall (subject to section 48 below) send a copy of any such report to—

(a) any person to whom the report refers or who (whether or not he has made a representation to the Council) appears to the Council to have an interest in the matter to which the report relates;


(b) the Director General of Fair Trading or any person whose functions under any enactment appear to the Council to be exercisable in relation to that matter;
(c) any person who appears to the Council to be a person who ought to take account of the report in determining how to act in relation to that matter;
(d) the Director.

(5) In reporting on a matter under subsection (4), the Council may recommend—

that the matter be reconsidered by the telecommunications supplier concerned;
that the Director consider exercising any of his functions under this Part.

(6) More than one recommendation may be included in a report under this section.

(7) Where the Council includes any recommendation in a report under this section, the report shall give the Council's reasons for making the recommendation.

(8) Where—

(a) a report is sent to any telecommunications supplier under subsection (6) above; and
(b) the report includes a recommendation directed to that supplier,

he shall have regard to it and notify the Council of the action which he has taken, or proposes to take, to comply with the recommendation.

(9) Where a telecommunications supplier fails to comply (whether wholly or partly) with a recommendation under subsection (5) above the Council shall refer the matter to the Director.".'.

New clause 46—Telecommunications Act 1984 (Advisory Bodies)—
'Section 54 of the Telecommunications Act 1984 (power to establish advisory bodies) shall cease to have effect.'.

New clause 47—Telecommunications Act 1984 (Advisory Bodies) (No. 2 )—
'The advisory bodies established under the Telecommunications Act 1984 shall cease to have effect.'.

New clause 48—Water Industry Act 1991 (Customer Services Committee)—

'-. (1) Section 28 of the Water Industry Act 1991 (customer services committees) shall be amended as follows.

(2) In subsection (1) for the word "Director" in each place it occurs there shall be substituted the words "Secretary of State".

(3) In subsection (3) for "Director" there shall be substituted "Secretary of State".

(4) For subsection (4) there shall be substituted—
(4) A customer services committee shall consist of—

a chairman appointed by the Secretary of State; and
such members (not less than ten nor more than twenty) of other members appointed by the Secretary of State as he may determine:"

(5) In subsection (5) for the word "Director" in each place where it occurs there shall be substituted the words "Secretary of State ".'.

New clause—Water Industry Act 1991 (duties of customer services committees)—
'—(1) Section 29 of the Water Industry Act 1991 (duties of customer services committees) shall be amended as follows.

(2) The following paragraph shall be inserted after paragraph (c) of subsection (1)—
and
(d) to advise the Secretary of State or as the case may be, the Director on any such matter as the committee considers appropriate.".

(3) In subsection (2) the words "Subject to subsection (3) below," shall cease to have effect.

(4) In subsection (3) for "refer to the Director" there shall be substituted "investigate".

(5) Subsections (4) to (6) shall cease to have effect.

(6) The following subsections shall be inserted after subsection (3)—

"(3A) Where under an investigation of a complaint under this section any matter appears to the committee to be a matter falling under paragraphs (a) or (b) of subsection (3) above the committee may prepare a written report on that matter and shall (subject to section ( ) below) send a copy of any such report to—

(a) any person to whom the report refers or who (whether or not he has made a representation to the committee) appears to the committee to have an interest in the matter to which the report relates;
(b) the Director General of Fair Trading or any person whose functions under any enactment appear to the committee to be exercisable in relation to that matter;
(c) any person who appears to the committee to be a person who ought to take account of the report in determining how to act in relation to that matter;
(d) the Director.

(6B) In reporting on a matter under subsection (6A), the committee may recommend—

(a) that the matter be reconsidered ;by the company concerned;
(b) that the Director consider exercising any of his functions under this Part.

(6C) More than one recommendation may be included in a report under this section.

(6D) Where the committee includes any recommendation in a report under this section, the report shall give the committee's reasons for making the recommendation.

(6F) Where—

(a) a report is sent to any company under subsection (6A) above; and
(b) the report includes a recommendation directed to that company,
the company shall have regard to it and notify the committee of the action which it has taken, or proposes to take, to comply with the recommendation.

(6G) Where a company fails to comply (whether wholly or partly) with a recommendation under subsection (6B) above the committee shall refer the matter to the Director.".'.

New clause 50—Water Act 1991 (Other functions of consumer services committees)—
'The following section shall be inserted in the Water Industry Act 1991, after section 29—

Other functions of consumer service committees.

29A.—(1) Every consumer committee shall, as soon as practicable after the end of each calendar year, make to the Director and to the Secretary of State a report on its activities during that year.

(2) Each report shall include a statement of the matters on which, during the year to which it relates, the committee has advised the Secretary of State or the Director under section 29 above.

(3) The committee shall arrange for every such report to be published in such a manner as it considers appropriate.

(4) In making any such report, the committee shall have regard to the need for excluding, so far as that is practicable—

(a) any matter which relates to the affairs of an individual where the publication of that matter would or might in the opinion of the committee, seriously and prejudicially affect the interests of that individual; and
(b) any matter which relates specifically to the affairs of a particular body of persons, whether corporate or unincorporate, where publication of that matter


would or might, in the opinion of the Committee, seriously and prejudicially affect the interests of that body.".'.

New clause 51—Water Act 1991 (Information by directors)—
'The following section shall be inserted in the Water Industry Act 1991, after section 41—

Information.

41A.—The Director shall give information collected by or furnished to him under section 38A above to the customer service committee allocated to the company concerned, with a view to facilitating the exercise of the committee's functions under this Part.".'.

New clause 52—Water Industry Act 1991 (customer service committees) (No. 2)—
'For Schedule 4 of the Water Industry Act 1991 there shall be substituted—

SCHEDULE 2

CUSTOMER SERVICE COMMITTEES

1. A customer service committee shall not be regarded as a servant or agent of the Crown or as enjoying any status, immunity or privilege of the Crown.

2. A customer service committee may pay to any member such sums, whether by way of remuneration or otherwise, as the Secretary of State may with the approval of the Treasury determine.

3. (1) Subject to sub-paragraph (2) below, a customer services committee may, with the approval of the Secretary of State as to numbers and terms and conditions of service, appoint such staff as it may determine. 

(2) A customer services committee shall not appoint a person to act as principal officer of the committee except after consultation with the Secretary of State.
(3) For the purpose of ensuring that there are persons available in particular localities of its functions under this Act, a customer services committee may, without any such approval as is required by sub-paragraph (1) above, appoint such persons to be so available as it may determine.
(4) Persons appointed under sub-paragraph (3) above shall not be paid any sums by the committee for or in respect of their services except sums reimbursing them for their travelling expenses and such of their other out-of-pocket expenses as do not relate to loss of remuneration.
(5) The consent of the Treasury shall be required for the giving by the Secretary of State of an approval for the purposes of sub-paragraph (1) above.

4. A customer services committee shall have power to do anything which is calculated to facilitate, or is incidental or conducive to, the performance of any of its functions under this Act.

5. It shall be the duty of a customer services committee to comply with any notice given by the Secretary of State with the approval of the Treasury requiring it to perform duties of a financial nature specified in the notice.

6. The Secretary of State may, to such extent as may be approved by the Treasury, defray or contribute towards the expenses of the Council.

7. Any sums required by the Secretary of State for the purposes of paragraph 6 above shall be paid out of money provided by Parliament.

8. In the House of Commons Disqualification Act 1975 in Part II of Schedule 1 (bodies of which all members are disqualified) there shall be inserted (at the appropriate place) the following entry—

"A Customer Services Committee"'

and the like insertion shall be made in Part II of Schedule 1 to the Northern Ireland Assembly Disqualification Act.1975.".'.

The following amendments: No. 50:

'The following Schedule shall be inserted in the Telecommunications Act—

TELECOMMUNICATIONS CONSUMERS' COUNCIL.

1. The Council shall not be regarded as a servant or agent of the Crown or as enjoying any status, immunity or privilege of the Crown.

2. The Council may pay to any member such sums, whether by way of remuneration or otherwise, as the Secretary of State may with the approval of the Treasury determine.

3.—(1) Subject to sub-paragraph (2) below, the Council may, with the approval of the Secretary of State as to numbers and terms and conditions of service, appoint such staff as it may determine.
(2) The Council shall not appoint a person to act as principal officer of the Council except after consultation with the Secretary of State.
(3) For the purpose of ensuring that there are persons available in particular localities of its functions under this Act, the Council may, without any such approval as is required by sub-paragraph (1) above, appoint such persons to be so available as it may determine.
(4) Persons appointed under sub-paragraph (3) above shall not be paid any sums by the Council for or in respect of their services except sums reimbursing them for their travelling expenses and such of their other out-of-pocket expenses as do not relate to loss of remuneration.
(5) The consent of the Treasury shall be required for the giving by the Secretary of State of an approval for the purposes of sub-paragraph (1) above.

4. The Council shall have power to do anything which is calculated to facilitate, or is incidental or conducive to, the performance of any of its functions under this Act.

5. It shall be the duty of the Council to comply with any notice given by the Secretary of State with the approval of the Treasury requiring it to perform duties of a financial nature specified in the notice.

(6) The Secretary of State may, to such extent as may be approved by the Treasury, defray or contribute towards the expenses of the Council.

(7) Any sums required by the Secretary of State for the purposes of paragraph 6 above shall be paid out of money provided by Parliament.

(8) In the House of Commons Disqualification Act 1975 in Part II of Schedule 1 (bodies of which all members are disqualified) there shall he inserted (at the appropriate place) the following entry—

'The Telecommunications Consumers' Council',

and the like insertion shall be made in Part II of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975.".'.

No. 51, new schedule—Electricity Consumers' Council ( Staff Etc.)—

1. The Council shall not be regarded as a servant or agent of the Crown or as enjoying any status, immunity or privilege of the Crown.

2. The Council may pay to any member such sums, whether by way of remuneration or otherwise, as the Secretary of State may with the approval of the Treasury determine.

3.—(1) Subject to sub-paragraph (2) below, the Council may, with the approval of the Secretary of State as to numbers and terms and conditions of service, appoint such staff as it may determine.
(2) The Council shall not appoint a person to act as principal officer of the Council except after consultation with the Secretary of State.
(3) For the purpose of ensuring that there are persons available in particular localities of its functions under


this Act, the Council may, without any such approval as is required by sub-paragraph (a) above, appoint such persons to be so available as it may determine.
(4) Persons appointed under sub-paragraph (3) above shall not be paid any sums by the Council for or in respect of their services except sums reimbursing them for their travelling expenses and such of their other out-of-pocket expenses as do not relate to loss of remuneration.
(5) The consent of the Treasury shall be required for the giving by the Secretary of State of an approval for the purposes of sub-paragraph (1) above.

4. The Council shall have power to do anything which is calculated to facilitate, or is incidental or conducive to, the performance of any of its functions under this Act.

5. It shall be the duty of the Council to comply with any notice given by the Secretary of State with the approval of the Treasury requiring it to perform duties of a financial nature specified in the notice.

6. The Secretary of State may, to such extent as may be approved by the Treasury, defray or contribute towards the expenses of the Council.

7. Any sums required by the Secretary of State for the purposes of paragraph 6 above shall be paid out of money provided by Parliament.

8. In the House of Commons Disqualification Act 1975 in Part II of Schedule 1 (bodies of which all members are disqualified) there shall be inserted (at the appropriate place) the following entry—

"The Electricity Consumers' Council";

and the like insertion shall be made in Part II of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975.'.

Mr. Redwood: The new powers to set standards and resolve disputes rest with the director general, but the Gas Consumers Council shares with Ofgas the responsibility for sorting out consumer complaints about British Gas. This new clause provides the framework to accommodate their special position, something which the Standing Committee that considered the Bill was keen to see. It will allow the Gas Consumers Council to carry out investigations of complaints that come to it, while ensuring that the customer is informed of his entitlement to have the dispute resolved by the director general.
Opposition proposals in their new clauses would complicate the position considerably. They amount to a vote of no confidence in the director general and a vote for confusion over the duties and responsibilities of the different bodies. I urge the House to reject the Opposition new clauses.

Mr. Nigel Griffiths: That was a very disappointing speech from the Minister. I am sorry that he seems oblivious to the large volume of complaints that he knows about because he has had more than one report on them—complaints that emanate from every part of the country and concern every utility. The commonest complaint from constituents, from the public, from the users, is that the utilities that were formerly public service companies have now become monopolies within the private sector. Regulation has failed and we would not be debating these clause if the earlier Act had not failed properly to protect the users of these utilities.
Nowhere is that failure more apparent than in the volume of complaints which the House is aware of. The Gas Consumers Council, for instance, has dealt with more than 125,000 complaints since it was established under the Gas Act 1986. It has answered 400,000 inquiries. It has had to deal through its regional offices with problems of billing, of service and of supply.
In the other sectors, about which the Minister has again had adequate information, the figures are equally shocking. In telecommunications there have been nearly 40,000 complaints in England and almost 50,000 complaints up and down the country, and that does not include the half a million complaints which have been received about billing disputes, most of which remain unresolved; this is the single biggest area of consumer dissatisfaction when it comes to unresolved complaints. There were more than 10,000 complaints about electricity and more than 4,500 complaints about water.
One may suspect, with considerable justification, that it is because of the inability—demonstrated by the utility, the regulator and certainly by the Secretary of State and his Department—to tackle those complaints effectively that there have not been many more complaints. There can be little doubt that people feel that it is hardly worth while complaining about water and electricity.
Nothing demonstrates that more than the electricity price increase forced on more than 22·5 million customers last year. At the beginning of 1991 the electricity operators began submissions to the regulator, advising that there would be an increase well above inflation. In spite of the fact that the Secretary of State, in February, stated his unhappiness with the expected size of the increase, and that the regulator was well aware of the planned price increase, it was approved. An increase of 10·6 per cent. was foisted on customers on 1 April when 6·4 per cent. was more in line with the RPI.
What happened then? We can judge how ineffective the regulator was in standing up for the consumer by the fact that by October the electricity companies had merely been asked what they were going to do about bringing their prices down towards the RPI figure of 6·4 per cent. In effect, the regulator was snubbed by them. The increased charges have been imposed for the past 10 months. Since October, the companies have done nothing except overcharge their customers.
I am grateful to Mr. Littlechild's department—the Office of Electricity Regulation—for giving me the figures. The rate of overcharging is staggering. OFFER told me today that Eastern Electricity was overcharging by 1·5 per cent. That does not seem much, but it amounts to £25 million. The Merseyside and North-Western electricity board is overcharging by 0·5 per cent., according to OFFER, which amounts to £2·5 million. Northern Electric has been overcharging by 2 per cent., which puts £12 million into its pockets. Southern Electricity has gained £17 million from overcharging, according to OFFER. The South Western electricity board has gained £10 million and Yorkshire Electricity has gained £7 million. That makes a staggering total of £93·5 million for overcharging electricity customers. Meanwhile, the Minister and the Secretary of State sat and did nothing and the regulator was powerless to act.
That is the Government's record on representing the consumer. It is shocking that the Minister should come to the House and dismiss so casually the merits of these excellent amendments.

Mr. Terry Lewis: Does my hon. Friend have the figures for NORWEB, which have been causing considerable problems for consumers in its area and have resulted in many letters to local papers, especially in Tory marginal constituencies?

Mr. Griffiths: My hon. Friend makes a good point. I missed NORWEB. To put the matter beyond doubt, the level of overcharging by that company was the highest in the country and netted it £20 million. My hon. Friend is assiduous in ensuring that such abuses are highlighted and in defending his constituents. He certainly speaks eloquently for the concerns of Opposition Members.
New clauses, 24, 25, 26, 27 and 28 and their effect on the Gas Act 1986, the Electricity Act 1989, the Telecommunications Act 1984 and the Water Industry Act 1991, will bring considerable advantage to consumers.
Let us consider why we are faced with the problems of overcharging and the high number of complaints.

Mr. Redwood: Does the hon. Gentleman agree that one of the main purposes of the Bill is to give director generals the necessary power to resolve the complaints and to take fully into account customer interest? Does he agree that his amendments do not help? The amendments say that customer complaints should go to the Secretary of State, but they do not give the Secretary of State power to override the director general and to determine the complaint. Surely it is better that the complaint be determined by the person who has the power—the person who receives the customer complaint.

Mr. Griffiths: The Minister has been in office since 1987 and is obviously a fast learner. We put down a reasoned amendment because we support the principle of the Bill, as we have made clear. The Minister seems surprised at that. If he reads the Second Reading debate, he will see that that was made clear to the House. Indeed, we support the principle to such an extent that I am only echoing what we said when the individual measures were going through the House earlier in the 1980s. It is the failure of those measures to take account of what Labour was saying at that stage which has necessitated the new legislation.
The saddest thing is that the Minister is prepared to go only halfway to meet the challenge that faces the industries in addressing consumer grievances. He is still over-concerned about the profits that the businesses were making. He is over-concerned to make sure that the directors are protected so that they can pay themselves what they want and can take whatever boardroom perks they want at the expense of the consumer. That will be the subject of further debate later.
The powers in the previous legislation were too lax to protect consumers. The powers in this Bill, sadly, are also lax. The Minister seems pleased about what has been happening and is willing to defend it. If we consider each area individually, we shall see why the new clause is necessary to address the problem of the ineffective consumer committees. We also propose a cut in the number of consumer committees from approximately 190—most of which are ineffective-to about 50 effective committees which will have tough powers to represent users.
In electricity there are 14 regional consumer committees, with one for each electricity company. They are funded via the licence fee. The members and the chairman of the regional committees are not independent of the regulator and the industry. They are hired and fired by the regulator. That is the main reason for our opposition to the present set-up.
The regulator has a distinct role as an economic regulator. That is very different from the role of consumer advocate. In many areas the blurring between the role of the regulator and the dependence of the consumer committees on the regulator have caused them to be so ineffective.
An indication of the dependence of the committees on the regulator is given in a brochure issued by one electricity consumer committee. It says that OFFER provides each committee with secretariat support. The committee secretary is a member of OFFER's staff. OFFER also provides each committee with its finances and its accommodation. The committees in England and Wales are based at OFFER's regional offices and those in Scotland are in OFFER's Scottish headquarters. That close link could have worked to the benefit of the consumer, but clearly it has failed the consumer. The reason is that the consumer committees have too often been toothless watchdogs, unable to command the information which new clause 27 addresses.
The structure for water is similar. There are 10 regional consumer service committees covering the various sewerage areas. The regulator appoints the chairmen, Ofwat—the Office of Water Services—provides the secretariat and, as with electricity, the chairmen of those committees comprise a national consumer committee which is chaired by the regulator. It is all far too cosy.
Only when we examine telecommunications, the area which generates the greatest number of complaints, do we see how ineffective is the present absurd structure established by the Government. There are four national advisory committees. They were set up specifically to be advisory bodies rather than user councils. An indication of their status can be gleaned from examining the submission of the English committee to Oftel's latest financial report. It expresses its gratitude to the Office of Telecommunications,
without whose support, the functions of an Act would be impossible to carry out.
One can bet that to be the case, with the use of its offices, its secretariat and, most important, being dependent on it for its membership.
Another fact has come as a surprise to several hon. Members with whom I discussed the matter earlier today. There are about 150 telecommunications advisory committees throughout the country. Earlier today, my research assistant telephoned directory inquiries for the telephone number of the telecom advisory committee for the Edinburgh area. The telephone operator told my researcher. "My screen says, 'See Advisory Committee on Telecommunications for Scotland' but when I key that, nothing comes up. I will refer you to a supervisor." A little later the supervisor said, "I am searching for you. Nothing is coming up. May I take your number and call you back?" I am still waiting for the return call.
In other words, we have, covering telecommunications, 150 advisory committees, the telephone numbers for which are apparently not in the telephone directory, and directory inquiries knows little, if anything, about them. It seems odd that, when a member of the public tries to contact one of the committees, its telephone number is not available. I will willingly give way to the Minister now if he can put forward any defence of those 150 telecommunications advisory committees. Nothing could be more indicative of the ineffectiveness of the Government's lapdog consumer representation than those advisory


committees. It is time that we had tough, effective committees representing consumers. That is what we are demanding today.
The new clauses have considerable importance. For example, new clause 24 would impose a clear duty on the Secretary of State to appoint members with appropriate expertise to the Gas Consumers Council and the other consumer councils. Lest my remarks about the Gas Consumers Council are misconstrued, I hasten to put on record my gratitude for the work done by that council and its staff. We want the powers of the other consumer councils brought up to the levels enjoyed by the Gas Consumers Council.
So the first aim of the new clause is to ensure that the structure of the consumer councils is similar to that which the Gas Consumers Council has enjoyed. The Gas Consumers Council is special, because it is completely separate from the regulator and is not dependent on the regulator for any form of patronage or secretariat. That separation is critical, because the job of the regulator is not simply to look after the Minister's and wider interests but to examine the interests of the business, as is right and proper. The consumer councils, however, have the job of championing the consumer. That is the model that we are seeking to embrace. We want to see the Gas Consumers Council as the model for all the utilities, with five key enhancements.
New clause 24 would ensure that consumer councils had people with the appropriate expertise—not necessarily as members but certainly as consultants and advisers. There can be little doubt that any consumer body, if it is to be effective, must have access to expertise.
That is something which new clause 24 would establish. Sadly, given the Minister's introductory remarks, as well as some of the comments that peppered the Committee stage debate and his previous speeches and writings on this matter, it is hardly surprising that he is not too keen to give consumers more effective access to information and expertise.
That, after all, is what puts pressure on business to justify its decisions. New clause 24 would give the consumer councils the weaponry to ensure that they were staffed with people who had an understanding not only of consumer affairs—vital though that is—but of how industry works. In terms of expertise, they would be on the same footing as both the regulator and the industry itself. They would not necessarily have the multi-million-pound back-up that business has, but at least they would be on the first rung of the ladder.
New clause 25 would empower the Gas Consumers Council, and the subsequent new clauses would empower the other consumer councils, to deal with enforcement matters. It is a matter of some concern that issues relating to licence conditions are currently outwith the remit of the Gas Consumers Council and, of course, none of the other consumer bodies or committees come close to dealing with that matter. We want to make sure that the consumer has access to the material that determines licensing and the licence conditions so that we may have someone to speak for consumers when a licence is being considered. There should be provision for vetting and for the structure to be considered with some expertise. The regulator is more neutral in this matter, and we need someone to champion the interests of consumers.
New clause 26 would give the consumer councils power, in dealing with an enforcement matter, to draw up a report

and make recommendations. We should like to see such a report sent to the regulator and, where appropriate, to the Office of Fair Trading, which plays a critical part in vetting business and in ensuring fair and proper business practice. Under this new clause, the utility would have to have regard to the report, and if it should fail to comply with the recommendations the consumer council would have to refer the matter to the regulator. We realise that the regulator would still have the last say in determining the outcome of a complaint, but the process would be much more open, and the consumer council would have much better access to the information, which at present is held by the regulator as the referee and by the utility itself as one of the major players.
To enhance that openness we need new clause 28, which would give the consumer councils the same access to raw data on the utility performance levels as the regulator has. It is critical that business should not be able to stand behind bogus and unsustainable claims of commercial confidentiality and that it should be compelled to provide the consumer bodies and others representing the consumers with information about how decisions are taken. Too often the regulators have been over-defensive and over-protective of their information. In this regard, I think that the Minister has accepted their defence. We all know of officials, whether in the private or the public sector, who are afraid to give up information. That is being overcome gradually. Once it has been overcome, businesses, councils and other bodies wonder why they were ever so secretive.
New clause 28 would give a further push in that direction, a further impetus to ensuring that data that might be used very effectively were made available. Of course, the Gas Consumers Council has been very effective in getting data—one way or another. It has been able to influence decisions because it has information. Over the past six years, one of its greatest achievements has been its campaign against disconnections. In 1988, the number was between 60,000 and 80,000; thanks to the gas consumers' pressure on Ofgas, on the basis of information that they collected through their regional offices, it is now below 20,000.
4.45 pm
I want to refer to something that may be a fear of the Minister and of those who think that individuals are the only consumers. Business consumers are often the biggest spenders and often stand to lose the most. We are very keen to see that they too are protected. The Gas Consumers Council brought about the change in British Gas's contract market to protect businesses. All the consumer councils established by the next Labour Government will be effective not just for the domestic consumer but for the business consumer. It will be remembered that the Gas Consumers Council referred British Gas to the Office of Fair Trading, with a recommendation that there should be a referral to the Monopolies and Mergers Commission. We know that, as a direct consequence of that, the contract matter became subject to regulation. Even where only limited information has been available, the Gas Consumers Council has been able to secure great benefits not just for the domestic consumer but also for the business consumer.
The sad thing is that, because the other advisory committees have been hamstrung in the way that I outlined, they have not been able to act in the same limited but effective way as the Gas Consumers Council. How


many disconnection abuse cases have not been properly addressed because the consumer bodies lack proper resources and proper independence? How many businesses have been paying too much because of the absence of a body like the Gas Consumers Council to champion their interests?
I do not understand why the Minister does not accept the thrust of this argument. Surely it is beyond party political dispute that, in the 1990s, we want consumer bodies that are as effective as possible, but the Government have been plagued by narrow dogma for the past 13 years, and the dogma is as alive and well today as it has been at any time during those years. The Government have been in favour of deregulation and have been intent on watering down consumer representation and on making sure that business is free to do very much what it wants.
With new clause 27, we want to make sure that the consumer committees are able to go directly to where the buck stops—to the Secretary of State—rather than through the regulator, as at present. It is ludicrous that a consumer committee should not have direct access to the Secretary of State. We all know that if a utility wants to speak to him, the Secretary of State—certainly in the case of the present Government—will trot down the road to meet it rather than expect it to come and see him. The importance of these five new clauses—the importance of extending the powers of the Gas Consumers Council and bringing all the other consumer bodies up to the strength of that council—cannot be overstressed.
It is important that any money that is spent at present is spent effectively. I want to know from the Minister how much is spent on the current consumer bodies—electricity, the National Consumers' Consultative Council and its 14 regional committees, the 10 water committees, the four Telecom national advisory committees—and I hope that he will be able to answer my question today. I should like to know, in particular, the budget for the 150 telecommunications advisory committees. We know, of course, that the budget for the 12 gas consumer committees is around £2 million. I want to see those 190 bodies, only one of which has been really effective, cut to around 50 on a regional basis, all of them with enhanced powers, championing the consumers' point of view, and making sure that the absurd and quite unjustifiable increases that have been forced on so many people are not perpetuated.
One of the problems that have to be addressed is the composition of these committees. If the past 13 years have taught us anything about quangos, it is that Tory quangos really are Tory quangos. The packing of these committees too often with defeated or failed Conservative party members is common. My predecessor as the Member for Edinburgh, South is a case in point. I will write to the Minister giving a list of the quangos that he was put on after he lost the Edinburgh, South seat. I am sure that my hon. Friends who were triumphant in the last election will act similarly.
This is the important message that I want to deliver. It is not that we will reverse what the Government have done with a mirror image. In the 1970s, it was noticeable that consumer committees and other quangos were much more balanced and had representatives of all parties and of no party. I want to see on the new consumer consultative committees people who, irrespective of party, know and care about consumers and do not have to carry a Tory

party card, as they often do now when appointed to these committees, and certainly to the higher salaried levels. That is one of the reasons why these bodies have been so ineffective.
We need consumer committees that truly represent consumers. That is why, in new clauses and amendments, we have suggested ways of democratising, which I am sorry that the Minister has not been able to take on board.

Mr. Alex Carlile: I agree wholeheartedly with the hon. Gentleman that it is necessary to have wide representation on consumer committees. However, at least in Wales, the Labour party had as bad a reputation as the present Government for putting its party members on to quangos. Will he confirm that the Labour party is committed to advertising places on consumer committees so that the widest possible range of applications can be received? Does he agree that that is the fair way of doing it?

Mr. Griffiths: I certainly have no objection at all to making sure that the widest possible publicity is given to the posts, and I have no objection in principle to advertising. However, I take deep exception to the hon. and learned Gentleman's earlier comment. We know from the speech that he made to trading standard officers how his thinking goes. He wishes to centralise everything—to make sure that everything is brought into the centre, that responsibility for trading standards is removed from local councils and brought to the centre. I wonder what malevolent purpose lurks there. I do not want to provoke the hon. and learned Gentleman——

Mr. Carlile: On a point of order, Mr. Deputy Speaker. The hon. Gentleman has ascribed to me a malevolent purpose, which is a personal slight on me, on an issue with which, with respect, the structure of trading standards authorities has nothing whatsoever to do. Surely the hon. Gentleman should be required to withdraw his assertion that I have a malevolent purpose and to apologise.

Mr. Deputy Speaker (Sir Paul Dean): I think that the hon. Gentleman was momentarily diverted from what is in order in the debate.

Mr. Griffiths: I accept your strictures, Mr. Deputy Speaker.
When the hon. and learned Gentleman interrupted me with what I thought was a fairly irrelevant and malicious intervention, I was drawing my remarks to a close by saying that there is a commitment on our part to ensure that consumers are adequately represented, as they are not at present, and that the widest possible membership is sought.
As I have said, I have no objection to the principle of advertising these posts. Indeed, if the hon. and learned Gentleman was in the Standing Committee when I raised the possibility of elections to these committees, he knows that that was not ruled out. Indeed, I was canvassing that pretty strongly myself in a probing amendment. So I am not prepared to take lectures from the hon. and learned Gentleman about the structure of such bodies. I believe that we are at one in wanting to ensure that there is much wider representation than at present and that we have effective bodies.
It is in that spirit that I commend the new clauses.

Mr. Redwood: The hon. Gentleman said that his researcher had had trouble finding the telephone number


of the Scottish TAC. My inquisitiveness has managed to get the reply very promptly. He may like to know that the number is 031—for those dialling from outside Edinburgh—244 5576. I cannot understand why his researcher went for such a long lunch that he could not find it.

Mr. Nigel Griffiths: The fact, Mr Deputy Speaker, is clearly that when the Minister's civil servants telephoned, it was fresh in their memories because they had just spent three hours finding it.

Mr. Redwood: That was a very pathetic attempt to recover the position. There is no secret, as far as I am concerned, about these numbers and I am very happy to advertise this one today through the usual channel of Hansard in this debate which is being so intently listened to by so many hon. Members.
The hon. Gentleman implied that appointments were made throughout the system of representation entirely by director-generals. He should note that the chairmen and members of the four national advisory committees of Telecom are appointed by the Secretary of State. So there is more distinction in those appointments than he was suggesting
I was not enchanted by the hon. Gentleman's idea of going back to the golden era of the 1970s, the winter of discontent and justice in appointments to all bodies. It did not seem to me to have the ring of truth about it, any more than it did to the hon. and learned Member for Montgomery (Mr. Carlile).

Mr. Alex Carlile: This is a winter of discontent for the Labour party.

Mr. Redwood: I am sure that the hon. and learned Gentleman is right in that intervention from a sedentary position. Also, Labour has not enjoyed comments on its tax proposals, but those are not relevant to this debate.
The main contention of the hon. Member for Edinburgh, South (Mr. Griffiths) is that there should be a clear distinction between the customer committees and the regulator. That is where I beg to differ and where I hope that the House will agree with the Government. In order to have effective regulation, there has to be one person or one body that can make the decisions, that can settle the complaints in the interest of either the customer or the business, based upon a fair judgment of the legitimacy of those complaints.
The great weakness in the Opposition new clauses—I suspect that they were not drafted by Opposition Front-Bench spokesmen but were drafted elsewhere—is that in the end——

Mr. Griffiths: What about Government amendments?

Mr. Redwood: Government amendments are, of course, approved by and in part drafted by Ministers, who are entirely responsible for them and have taken an active part in their drafting. The hon. Gentleman does not know how government works; it is so long since his party has been in government. Little does he know how much attention these amendments get from Ministers.
The Opposition new clauses suggest that the regulator should still be the only person in the system with the power to determine disputes, so although the hon. Gentleman tries to make out that there is a big divide between us, in practice we seem to agree on the important thing—that only one body or person can settle those disputes and that

person or body should be the regulator in each case. The hon. Gentleman did not answer my intervention on that point, and I think that he now accepts that there is no difference between us on that crucial matter.
The hon. Gentleman's new clauses would create far more confusion in the system. They would disrupt existing boundaries between the consumer bodies and the director generals. They would try to shift the balance and would give the consumer bodies a more advisory power, but they, would have no power to deliver that, so they might increase the tensions and boundary disputes within the system, rather than help the proper and prompt settlement of disputes by the director general.
5 pm
If Labour Members have no confidence in the directors general, they should say so and be honest in their criticisms. They should say why they think a particular director general is falling down on his task and should come forward with their own recommendations on how it could be done better. I think that we are well served by the current directors general and, with the strength and powers in the Bill to settle customer disputes, in all cases with the force of law behind them, they will provide an even better service, as the Opposition and the Government want.
The hon. Member for Edinburgh, South says that he has been reading my speeches and writings, but he has not been doing so very attentively or he would know that I have often insisted on the primacy of a customer interest. One of my main criticisms of the performance of the nationalised industries under Labour and Liberal Administrations in the past is that they were too negligent of customer interests, and that customer interests needed to be promoted in the order of priorities. That is exactly what a policy of competition does. Under a competitive system, customers are put first because everyone wants to win their business. Under the system of regulation that we have laid out in recent years and which the Bill now strengthens, customer interest is a driving force for better quality, prices and service from businesses.
One of the new clauses proposed by the Opposition seeks to change the balance of representation on the Gas Consumers Council. It says that that council should consist of people with direct practical experience of the industry's activities. I suspect that, again, the Labour party has not done its homework, for if it had, it would see that three members of the Gas Consumers Council have direct practical and professional experience in the areas which Labour Members say should be represented on that council. One is an engineering consultant with a lifetime's experience of fuel issues and two are currently in business in the commercial sector as fuel purchasing managers, with exactly the detailed knowledge and experience which Labour Members say should be available to the council.
Therefore, we do not need the new clauses, because it is clear that current practice takes into account the need for the right kind of expertise on that body, and it already works perfectly well. The right clarifications that the Bill needs to settle the boundary lines between the Gas Consumers Council and the regulator are those in the Government new clause. I commend our new clause to the House and urge hon. Members to reject the other new clauses.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 13

THE DOMESTIC SUPPLY DUTY

' . In section 52 of the Water Industry Act 1991 (the domestic supply duty), in subsection (2), the words "and which are situated in the area of the undertaker" shall cease to have effect.'—[Mr. Redwood.]

Brought up, and read the First time.

Mr. Redwood: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to take the following: Government new clause 22—
Transitional provision with respect to replacement appointments.—
Government amendments Nos. 24, 47, 25, 26, 30, 33, and 41 to 45.

Mr. Redwood: The clauses dealing with competition in water services were the subject of a public consultation undertaken by the Department of the Environment and the Welsh Office just before the Bill's publication last November. Those who commented during the consultation generally welcomed the increased scope for competition but many considered that the proposals were still too restrictive and suggested modifications. As a result, we have now brought forward—as I said we would in Committee—amendments to give still greater encouragement to competition. Those amendments are along the lines that I outlined to the Committee.
Part of this group of amendments—new clause 13 and amendments Nos. 25, 26, 43 and 45—will ensure that water and sewerage undertakers must allow any prospective customers to connect a service pipe to their water mains or a drain to their public sewers, whether or not those customers are in the area for which the undertaker is appointed.
Initially at least, the new right is likely to be used mainly by prospective customers close to the border of their appointed undertaker, who may he nearer to the neighbouring undertaker's mains or sewers than to those of the local company. As inset appointments are made, the practical opportunities for connecting to another undertaker are likely to increase, giving more choice to more customers.
The customer will continue to be responsible for providing the service pipe or drain from his premises and meeting the cost of making the connection to the undertaker's main or sewer. Commercial agreements could vary that practice
Amendments Nos. 24, 30, 33 and 44 will replace the arrangements at present in clauses 38 and 39 with provision for companies to be given an inset appointment to serve a single large customer. A large customer is defined as one using more than 250 megalitres of water a year. There is provision for the Secretary of State to reduce that threshold, after consulting the director. Applications for inset appointments are subject to procedures laid down under section 8 of the Water Industry Act. They require applications to be published within 14 days of being made and will thus adopt the suggestion of the right hon. Member for Swansea, West (Mr. Williams) for meeting the concerns raised by some hon. Members in Committee about the length of the consultation period on proposed appointments to serve large customers.
There are also necessary consequential amendments. Those include transitional provisions in new clause 22 to

cover the period between an appointment being made and its coming into force; provisions in amendment No. 47 to ensure that the necessary pipe-laying powers are available where an inset appointment is to serve a single large customer; and requirements for the NRA, which is responsible for water resources, to be kept informed of applications for inset appointments.

Mr. Win Griffiths: As the Minister rightly points out, he gave undertakings in Committee that the Government would attempt to widen competition possibilities. The amendments certainly do that, but only in theory. Practice will show that the amount of competition will be at the margins of the existing water company areas because of the infrastructure costs of moving a great distance into another water company area, and even the need to create extra water capacity that does not exist in many areas. About three water companies have enough spare capacity to consider competing with other water undertakers, and it is highly unlikely that anything will happen in practice. The proposals to extend competition are simply a fig leaf for the privatised monopoly that will still exist in the form of the water companies.
We shall not vote against the amendments because, if we find that they come to something, all well and good, but the public should not be fooled by the idea that competition in the supply of water or sewerage services will be significantly increased. The existing companies simply do not have the capacity to become involved in a big way.
I raised the following question in Committee and was not absolutely satisfied by the Minister's answer. In a period of drought, with the water company having made commitments outside its area, will the companies within its area take precedence in terms of supply or will they suffer because of contractual commitments made by the water company outside its area?

Mr. Redwood: I am grateful for the hon. Gentleman's grudging assent to the proposals. We must wait and see what develops. They are methods by which competition can develop and spread in the industry, and we welcome them for that reason. Fig leaves can be becoming and may turn out to be rather larger and more becoming than the hon. Gentleman suggested. The proposals also include ways in which competition could be further strengthened as in the case of the 250-megalitre limit which can be reviewed when we have seen how it develops. That will provide a way to vary the current practice under the proposed legislation when the Government and the director general think it right to do so.
I have nothing to add to the reply that I gave the hon. Gentleman in Committee about what happens when there is a scarcity of water. other than to remind him that the legislation requires the water companies to maintain supplies. Of course, there are ways in which water rationing can be introduced for non-essential uses in good time so that fundamental supply is not interrupted.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New clause 22

TRANSITIONAL PROVISION WITH RESPECT TO REPLACEMENT APPOINTMENTS

' . The provisions of section 10 of the Water Industry Act 1991 (transitional provision with respect to replacement appointments) shall become subsection (1) of that section and the following subsections shall be added at the end—

"(2) Subsections (3) and (4) below apply where, by such an appointment or variation, one company ('the new undertaker') is to replace another company as a relevant undertaker, but the appointment or variation has not come into force.

(3) The following provisions of this Act shall (except where they are inapplicable to the kind of undertaker in question) apply in relation to the new undertaker as if the appointment or variation had come into force—
(a) sections 18 to 24 and Schedule 3;
(b) sections 32 to 35;
(c) section 155 and Schedule 9;
(d) sections 156, 158 to 161 and 163 to 167 and Schedule 11;
(e) sections 168 to 171, 173, 174, 178 to 180 and Schedule 12;
(f) sections 181 to 183 and Schedule 13;
(g) sections 184 to 188 and Schedule 14;
(h) sections 189 to 192, 197 to 200, 202, 203, 206, 208, 209, 211, 212 and 217.

(4) Such of the conditions imposed on the new undertaker under section 11 below as the Director may specify in a written notice given by him to the undertaker shall have effect, in relation to the operation of any provision mentioned in subsection (3) above before the appointment or variation comes into force, as if the appointment or variation had come into force.

(5) The Secretary of State may by regulations amend subsection (3) above by adding to, removing or modifying references to provisions of this Act.".'.—[Mr. Redwood.]

Brought up, read the First and Second time, and added to the Bill.

New clause 23

CONDITIONS FOR CONNECTIONS WITH WATER MAINS AND FOR SUPPLIES OF WATER

' .—(1) Section 47 of the Water Industry Act 1991 (conditions of connection with water main) shall be amended as set out in subsections (2) to (4).

(2) In subsection (2)(b)(ii), after "expenses" there shall be inserted "reasonably".

(3) After subsection (2) there shall be inserted the following subsection—
(2A) No condition shall be imposed by a water undertaker under subsection (2)(e) above unless the undertaker would have difficulty in discharging its statutory obligations, in relation to the supply of water to the relevant premises or any part of those premises, if the condition were not imposed.

(4) After subsection (3) there shall be inserted the following subsections—
(3A) Any dispute as to whether any requirement of a kind mentioned in subsection (2)(a), (b), (e) or (f) above has been complied with may be referred to the Director for determination under section 30A above by either party to the dispute.

(3B) Any dispute between a water undertaker and any other person as to whether—
(a) any security required by a condition imposed under subsection (2)(a) above was reasonably required,

(b) the expenses referred to in subsection (2)(b)(ii) above were incurred reasonably, or
(c) in a particular case, subsection (2A) above prevents a water undertaker from imposing a condition under subsection (2)(e) above,
may be referred to the Director for determination under section 30A above by either party to the dispute."

(5) In section 53 of the Act of 1991 (conditions of compliance with domestic supply duty), in subsection (2)(a)(ii), after "expenses" there shall be inserted "reasonably" and after subsection (2) there shall be inserted the following subsection—
(2A) Any dispute between a water undertaker and any other person as to whether the expenses referred to in subsection (2)(a)(ii) above were incurred reasonably may be referred to the Director for determination under section 30A above by either party to the dispute.".'.—[Mr. Redwood.]

Brought up, and read the First time.

Mr. Deputy Speaker: With this we shall take Government amendment No.46.

Mr. Redwood: I beg to move, That the clause be read a Second time.
Section 47 of the Water Industry Act 1991 allows a water undertaker to require customers to meet certain conditions before the undertaker has to carry out its duty to connect a customer to its water main and to provide a supply of water for domestic purposes. In some cases there may be room for dispute about whether it is reasonable for undertakers to impose a particular requirement. New clause 23 limits the circumstances in which an undertaker can require separate service pipes and the costs of disconnection that it can recoup from the customer. It also provides for disputes about certain of the requirements which can be imposed to be referred to the director for determination. The new clause also includes the provision of clause 31(4) which is deleted by amendment No.46. I commend the new clause to the House.

Question put and agreed to. Clause read a Second time, and added to the Bill.

New clause 1

PRICE RéGIME

'Having determined the standards of overall performance under 27B(a) above, the director will give due regard to the price régime which he approves to assess whether that price régime is appropriate in relation to the provison of the standards of overall performance and the level of remuneration received by the directors and senior managers; and the Director will require the operator to change that price régime to one which is commensurate with the standards of overall performance which are met and the cost structure of the operator in meeting those targets.'—[Mr. Henderson.]

Brought up, and read the First time.

Mr. Doug Henderson: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this we shall take the following: New clause 7—Energy efficiency objectives—
'.—The Director shall give due regard in the price regime which he approves to the achievement of standards of overall efficiency in the performance of the electricity companies in their duties to meet consumers' needs, and in particular the contribution made in achieving energy efficiency objectives laid down in section 3 of the Electricity Act 1989.'.
New clause 54—Prohibition of late payment penalty charges by electricity companies—
'.—The following subsection shall be inserted after subsection (3) of section 18 of the Electricity Act 1989—


(3A) A domestic tariff fixed by a public electric supplier shall not include provision for any additional charge upon any person solely because of delay by that person in paying monies due in respect of supply".'.

Mr. Henderson: It might be helpful if I were to explain the contents of the new clause. New clause 1 provides that, where a regulator is empowered to set standards within an industry, he must take some account of the prices charged. I hope that the House accepts that there is a clear relationship between the provision of standards and the price that a consumer or customer might have to pay. Most of my remarks will deal with new clause 1. I had hoped that my hon. Friend the Member for Cardiff, West (Mr. Morgan) might be able to comment on new clause 7 and I hope that my hon. Friend the Member for Sheffield, Heeley (Mr. Michie) will comment on new clause 54.
In many ways, new clause 1 is important because it relates in principle to a number of organisations and industries covered by the Bill and which the Bill attempts to regulate. Many hon. Members and some members of the public might wonder whether the Bill as originally drafted and the Acts on which privatisations were based—for example, those dealing with telecommunications and gas—do not already give a regulator considerable powers to do several things, including set the prices. That is the case, but the Government, recognising the weakness in the current legislation, have identified the fact that it is necessary to go further and to place an obligation on a regulator to establish standards of performance for individual customers and for the industries in general. We support the objective but having gone that far, we believe that it is also necessary to give additional powers to the regulator, which will emphasise the responsibilities involved in setting those standards, to take into account the resulting price regime.
We have not tabled the new clause merely to extend the debate on the Bill. There is considerable evidence that Oftel—in the case of telecommunications—has not been as effective as most of us want it to be. It has not been able to regulate the industry effectively in the ways that we believed essential for the future of the industry and for the protection of the customer.
Very few people would dispute the fact that British Telecom has high—some would say excessive—profit levels. In the various discussions between British Telecom and Oftel, Oftel has not been able to get to grips with the way in which British Telecom can interpret price agreements one year and follow through with largely inflated profits in the following year.
Similarly, Oftel has not been able to have meaningful discussions with British Telecom about the way in which British Telecom's cost structures relate to the provision of the service. It has not been able to get to grips with the level of salaries paid to senior executives of that company. I hope that the House accepts that that is a legitimate issue about which the regulator should be concerned. If not, there is an open invitation to any private monopoly to pay its bosses salaries which are in no way commensurate with the level of responsibility. Some obligations should be extended to the regulator to take care of those shortcomings.
I shall not prolong the argument in supporting new clause 1, but it is necessary to give a little more evidence covering some of the issues which were debated in another context in Committee. Whatever the Government say about the improvements in British Telecom's control over its prices increases since 1984—I accept that controls have been tighter since then—the evidence still shows that during the Government's period in office from 1979 until now, British Telecom's prices have moved ahead of the retail price index by 3·1 per cent. That has happened at a time when everyone in the industry internationally recognises that there have been huge improvements in productivity.
The Government cannot dispute that, whatever else has happened in the telecommunications industry in this country over the past 10 or 12 years, there would have been major improvements in productivity which arise—thankfully—out of major changes and improvements in scientific knowledge and its application. That, above all, has enabled British Telecom to be slightly less aggressive in its price increases since 1984, but there is still a long way to go.
I do not believe that the Financial Times is objective in all issues but it has taken a special interest in the changes in telecommunications. Indeed, on many occasions it has complimented the Government on the changes that have taken place. At the time of the announcement of the last set of results for British Telecom the Financial Times said that its profits were £1 billion more than would be expected from a reasonable profit return on capital in a company that was reasonably well managed and achieving slightly better than average performance. Spread among the 20 million residential customers of BT in this country, that money represents about £50 per family.
That £1 billion could be spent in a number of different ways. I do not intend to judge how the money should be spent; I merely make the point to emphasise that, should the Government or any telecommunications company choose to start taking action on this matter, the resources to do so exist.
I do not want to overplay the salary increases of the bosses of private utilities, but it would be wrong not to take note of the recent salary increases enjoyed by the chairman of British Telecom. Between 1988–89 and 1989–90, he received a 90 per cent. increase in addition to other fringe benefits, taking his salary from £282,000 to £374,000. If that was not enough, in the following year, the latest for which we have figures, he received an additional 43 per cent. pay increase—between 1989–90 and 1990–91—taking. his pay to £536,000. That tells us something about the cost structures of British Telecom.
Of course I recognise the need to pay attractive salaries to senior management in private utilities so as to attract the best people to them. I make no judgment on these levels of salary. It is however, legitimate for the regulator to be able to assess how appropriate the bosses' salaries are as one factor in a general assessment of whether the cost structures are appropriate to the standards of performance and to the price regime.
British Telecom is apparently not satisfied with present levels of profitability, as we were told in press accounts yesterday. It is not happy with the present price regime agreed with the regulator. In the talks to begin in a few weeks time, it proposes to lay down a new agenda for the regulator, to the effect that the obligations into which it has already entered to reduce prices have been so onerous


that it cannot continue with them, and that it wants to slow down the process of improving prices. So British Telecom is not prepared to agree to the same price cuts next year as those to which, to some extent at least, it agreed this year.
British Telecom also says that line rental charges—they are excessive and there is great scope for reducing them in real terms so as to extend phone ownership—are not high enough and that it wants to increase them relative to its other charges. I repeat, therefore, that it is important when assessing standards of service to scrutinise prices and cost structures.
The Government have consistently argued that competition can help to bring prices down and improve the industry's performance. I do not dispute that competition has an important role in attempting to achieve those valid objectives, but there is not much competition among providers of telecommunications services. Mercury has a small percentage of the business market, although that is concentrated in the City of London and in other major cities. It is a fairly lucrative market, but Mercury has not attempted to take on the residential market. In effect there is no competition in the provision of residential telephone services—British Telecom has an effective monopoly.
The only difference now is that this is no longer a public monopoly with some accountability: it is a private monopoly, and instead of a direct relationship between the state and the monopoly provider, there is now an indirect link through the regulator.
I do not dispute that this is the shape of the future, but if it is, we must ensure that the conditions are right to govern the way in which the regulator operates. Regulation will be the key to making providers of utility services accountable to the public.
The Government should accept that this principle is valid, and that there is serious public concern about British Telecom prices and about the amount of its directors' remuneration. They must also accept that prices must be related to standards of service. We discussed this in Committee, although not as explicitly as the new clause does. I hope that the Government will show more flexibility than they showed in Committee and that they will show themselves willing to listen to the arguments, to understand public anxiety and to accept the new clause, which I believe will bring about more public confidence in the way in which these important private utilities are run.

Mr. Ian Bruce: Is the hon. Gentleman suggesting that a Labour Government would set the prices of British Telecom or any other large telecommunications provider? Would a Minister decide how much to charge the consumer?

Mr. Henderson: The hon. Gentleman must be telepathic, because he has moved on to the last point that I wanted to make. Before doing so, I can assure him that a Labour Government would not set prices for the utilities. It would set out general objectives for the utilities, and the regulators would be charged with implementing that agenda in negotiations and consultations with the utilities.
If the Government this evening fail to accept the new clause—it is an utterly reasonable new clause—I give notice that a future Labour Government will seek to modify the context in which utilities provide a service. We want to toughen up regulation, not to weaken standards of

service. We want good standards of service in telecommunications and other utilities, but we also want the regulator to get a grip on the price regimes adopted by the various utilities.

Mr. Bill Michie: As my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) said, I shall be concentrating on new clause 54, which stands in my name. The idea behind it is to safeguard the position of low-income electricity consumers by stopping electricity companies charging for late payment.
When this matter was first brought to my attention, only Yorkshire Electricity was carrying out this practice of imposing penalty charges on customers who paid late—it was something of a novelty. But it was said that we needed regulation to stop the practice for fear that other companies would follow suit. Just today I have heard that other companies are to take up the practice, and that gives added strength to my argument in favour of the new clause.
The amount of penalty paid is determined by the length of the delay in payment and can amount to between £9 and £16. Many people cannot pay their electricity bill on time because they have low income, and to add £9 or £16 to the next quarter's bill makes matters worse. It does not solve any problems but creates more. No one argues that people should not pay if they can afford to pay or that the companies should not try to obtain their rightful dues. However, the practice that I have described discriminates against low-income families with budgeting problems.
5.30 pm
It is argued that slow payment or non-payment can have an enormous effect upon profits and is unfair to those who pay on time because they will be charged more to offset people who are not paying on time or do not pay at all. There is some strength in the argument that good payers may be affected by non-payers but that will be the case only if companies are struggling to make a decent profit. Of course, that is not the case at all.
The recently released interim results for the first six months of 1991–92 show that Yorkshire Electricity's profits are up by a fifth. In the six months to 30 September 1991 its pre-tax profits were £33·1 million, an increase of 17 per cent. on the £28·3 million profit for the first six months of 1991. Over the same period, its operating profit fell slightly from £34·8 million to £34·3 million. That was largely due to the point that I am making—the provision against bad debt. Despite that, the operating profit represents the equivalent of £18·79 per domestic customer. That is a considerable profit, bearing in the mind the number of customers. A profit of £34·3 million shows that Yorkshire Electricity is not short of money and does not need to take such drastic action.
The problem with low penalty payment schemes such as the one adopted by Yorkshire Electricity, is that they do not fully discriminate between people who can afford to pay their bills and those who are struggling. Those who are struggling, consumers on low incomes with difficulty in budgeting, are supposed to be helped by the companies. That was the whole point of some of the regulations discussed in Committee and elsewhere. The companies should not penalise them.
It is well known that the franchise licences under which the electricity companies operate require them to


formulate and abide by codes of practice on debt recovery and discrimination. They require companies to give every assistance to people to pay their bills if they have difficulty in budgeting. Regrettably, the electricity regulator has not so far been able to persuade those companies, and certainly not Yorkshire Electricity, to withdraw the penalty scheme.
I was glad to hear from my hon. Friends that they support the new clause, which I shall not press to a vote. I have been assured that the points that I have raised will be carefully considered. I am sure that we shall have a Labour Government after the next election and that they will give effect to the new clause in a code of practice, or something of that nature. I have doubts about codes of practice, because I understand that they are self-regulating and I should like something stronger. I hope that my hon. Friend who will be responsible for future legislation will bear that in mind.
Many people are affected by the penalty practice. The late payment scheme that operates in Yorkshire is thought to penalise at least 20,000 to 30,000 low-income consumers per year. I estimate that the figure is more likely to be 40,000 per year. For that reason alone, it is time that the House made sure that the companies do not impose such fines on people who face financial difficulties. That is the point of the new clause, and I hope that it will be taken on board.

Mr. Peter Hain: I support the new clause. The problem with the Bill and the Government's attitude to and policy on telecommunications in particular, although it also applies to water, gas and electricity, is that, under privatisation, prices are geared to the interests of big business and not to the interests of the ordinary citizen. That is the essential problem we face when seeking to introduce consumer protection legislation.
Old-age pensioners, the disabled, the poor and the unemployed get a very bad deal from the large private monopoly utilities. They get a particularly bad deal from British Telecom in terms of standing charges and the pricing regime. They also get a bad deal because of high deposits, and are cut off when they are unable to pay the high charges. The whole pricing regime seems to close in on such people and denies them their elementary human rights. Therefore, they suffer a double penalty, first by being poor and secondly by having imposed upon them charges which they cannot possibly bear.
I spoke about elementary human rights. Conservatives may snigger and dispute that, but in a modern age it is a human right to have the essential lifeline of a telephone. As the family is broken up and extended, many citizens are deprived of links with their families. People are huddled in city centres, often frightened to go out of their homes because of rising crime, and they lack the income to enjoy a decent quality of life. For them the telephone is a vital lifeline and therefore an essential citizen's right.
The present pricing regime, which the Government are happy to allow to continue and which they encourage, denies such people access to a telephone. That is a deliberate policy by the Government, as one can see from the rebalancing of tariffs to which my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) referred. That rebalancing, carried out in negotiations between British Telecom and Oftel, deliberately increased rental charges by much more than

ordinary charges. That bears most heavily on the poorest sections of the population. Rental charges have shot up over the past year.
In the first half of 1991–92, revenue from rentals increased by 14·8 per cent. That is more than double the average RPI increase over that time. As my hon. Friend the Member for Newcastle upon Tyne, North has said, not content with that, British Telecom now seeks an increase in rental charges. As I have said, that will bear most heavily on those who are least able to carry the charges.
Many old-age pensioners who come to my surgeries are paying more for rental than for telephone calls. In some cases, they pay 10 times more. That problem bears most heavily on pensioners who are just above benefit level—the income support level—perhaps because the husband has been a miner and has a miner's pension, which is often trivial, and is therefore not entitled to the range of benefits to which he might be entitled if he were paid the basic retirement pension. He is faced with telephone charges that seem to him to be sky high.
The Minister may say that British Telecom has introduced the support-line scheme and has operated the low-user rebate scheme for a while, but rental charges are still far too high under the support-line scheme. They are £9·23 a quarter. That may not be much money to the Minister and his colleagues who enjoy high salaries but it is a great deal of money to ordinary pensioners who are on low incomes. Conservative Members may scoff, snigger or laugh, but they do not understand and they do not care about the conditions in which ordinary people are living.
The installation charge for a telephone is £163·05, which is about three times the sum to which a single retirement pensioner is entitled. Many of the people to whom I have referred do not have a very good credit rating and so they have to put down a heavy deposit. What prospect is there of such people acquiring a telephone in those circumstances?
At the same time, BT is generating huge profits. It makes a profit of £105 every second. The Minister may say that most of BT's profit has been channelled into investment. I understand that argument, but the ordinary consumer, including the ordinary pensioner, who cannot afford to have a telephone installed, will take the view that exorbitant profits are being generated. He or she will want to know why BT is not finding the cash to reduce rental charges or, in some circumstances, to abolish them, and why it is not funding the provision of telephones for some of the most vulnerable and deprived citizens.
Ordinary consumers do not understand how the chairman of BT can get £10,000 a week while they receive perhaps less than £100 a week and are denied access to a telephone. The Government should ensure that there is a pricing policy that makes it possible for every householder to afford to have a telephone installed. If installation charges were either free or purely nominal, I believe that BT and the Government, through corporation tax and so forth, would get their money back in no time at all. The increase in tariffs that would come from the increased use of lines would produce extra revenue for BT. It could be that it would be able to introduce a new pricing structure that abolished standing charges for pensioners and those on income support, for example, while having a higher initial tariff to fund that abolition.
In many instances a telephone is an essential lifeline for a pensioner who lives alone, and it is interesting that a third of single pensioners do not have telephones. That is


deplorable in a civilised or so-called civilised society. It is interesting to compare our household penetration rate with the rates of other countries. I understand that 80 per cent. of residences here have telephones. In the United States, the rate is 95 per cent. It is even more significant that it is 98 per cent. in France. The French have a publicly owned telephone system that is regarded as the best in the world. The "great" privatised telecommunications system that the Government praise to the rooftops cannot get anywhere near what the French have achieved. As I have said, a third of our single pensioners do not have access to a telephone. That is deplorable, especially when the competitive regime has been rigged in such a way that businesses receive much more favourable treatment than ordinary consumers.
I urge the Government to change the regulatory regime. If they do not use the Bill to do that, they should do so after it has been enacted. They should ensure that there is a level playing field between BT and its major competitor, Mercury, and any other competitor that comes into the market. That would enable BT to concentrate on providing an equal service for everyone instead of giving a better service to the business customer. It is the business sector that provides the profitable market and that is where competition is fiercest. Accordingly, BT is forced to drive down its prices if it is to compete, but every citizen requires low prices, or at least prices that are fair. We shall not see such prices until the regulatory regime is changed.
I believe that the Minister will have to acknowledge that the introduction of an allegedly consumer protectionist Bill will have no effect because of the pricing and regulatory policies that have been introduced. Market forces are not sufficient to protect consumers. Consumers need rights to be enforced and pricing policies that are designed to protect them. The Government may claim to be the champion of the shareholder in the context of telecommunications, but they are not the champion of the consumer. When we look back with the benefit of historic hindsight on the 1980s and early 1990s and reflect on telecommunications policy, I believe that it will be seen to be geared to the short term. Investment in BT is falling while profits rise. Consumers take second place while the number of complaints shoots up.
It is time that the Government changed their entire policy. They should act to protect the consumer. They should allow BT to stop looking over its shoulder towards domestic competition and enable it to become a leading player in the global market. At the same time, BT should ensure that old-age pensioners, the disabled and those who are on low incomes have the benefit of a telephone and have a decent quality of life.

Mr. Redwood: I am grateful to all those who have contributed to the debate. On many occasions it seemed that the Opposition's policy, on analysis, was similar to that which the Government are recommending. I am grateful to my hon. Friend the Member for Dorset, South (Mr. Bruce) for his intervention, which teased out the fact that, when it comes to how the system works, the Labour party is endorsing much of what we have been doing.
I think that the right approach is the promotion and development of competition wherever possible and the existence of firm and clear regulations for monopoly areas, where customer interests are very important and are a duty

upon the regulator. That is exactly what our legislation and regulatory framework provide. The Bill and other regulations and legislation that are already in being require the establishment of standards of performance and standards of service. It is against the background of those standards that the price regime is agreed.
I cannot see how the kernel of the Labour party's proposal in new clause 1 would do anything or why it is necessary, given the requirements that are already upon the industry, as are set out in the Bill and in preceding legislation, licences and regulation.
The Bill provides measures to prevent a reduction in standards to achieve a hidden price rise. I think that the Labour party agrees with that proposal. The regulator has, of course, to bear in mind the total costs of the industry when considering price caps. Labour's policy towards BT was described at greater length in Committee, and it seems that the Labour party would cut profits and at the same time demand increased investment. As we said in Committee, that is an implausible policy for the Labour party to recommend. Profits have an important function in paying for investment and providing the necessary signals to make the investment worth while.
I am glad that the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) accepted that prices have been much better controlled since 1984. Indeed, only since 1984 has there been a sensible system of price control. There was never one under nationalisation. There was no effective system through Ministers or directors in the 1970s when Labour and Labour-Liberal Administrations were in being. The hon. Member for Newcastle upon Tyne, North has not yet seen a full year's trading with the new retail prices index minus 6·25 per cent. formula. He must be aware, however, that it is the most stringent system of control to be operated anywhere in the world. I think that it is one of which BT, the industry and the country can be proud. Prices will fall by 6·25 per cent. in real terms during the period of that price control.
The hon. Member for Newcastle upon Tyne, North, asked about the future. He asked whether there would be a review of line rental charges and the price cap. He put forward the views of BT. He well knows that in due course there will be a review of these matters. The evidence of BT and of other interests, including customers and the Opposition, if they care to submit evidence, will be carefully considered by the director general.
The hon. Member for Newcastle upon Tyne, North, expressed scepticism about the power of competition. He did so not because he doubts the theory that competition can do the job but because he wonders whether the practice will build up, especially in the local loop. He should look carefully at what is happening with the development of local loop competition from cable television operators entering telephony. He might like to know that there are 20 licence applications at the Department of Trade and Industry for new services under the duopoly review that we announced last year. I hope that we shall be able to make speedy progress in processing and granting the licences where the applications are of the right form. Some of these services will strengthen competition in the local loop. I hope that the hon. Gentleman will welcome that when we can make the announcement.
The hon. Member for Sheffield, Heeley (Mr. Michie) spoke to new clause 54. I have a great deal of sympathy with what he said about those who are under considerable


financial pressure when faced with the possibility of additional charges from their electricity utility. I am glad that the hon. Gentleman raised that matter, because he will find that action has already been taken that goes a long way to meeting his requirements.
The hon. Member understood in his speech that, if people deliberately delay payment until they are finally threatened with disconnection, they increase the costs for other electricity consumers. They increase the cost of capital for the business as the business has to borrow for the money that it has forgone and it is incurring the additional cost of reminder letters and chasing up before the final threat of disconnection and the levying of the additional charge. He said clearly that, if people can pay but will not do so, it is not unreasonable for them to pay more when the utility catches up with them because they have imposed those additional costs upon other electricity consumers, many of whom are less well off but who have met their bills on time because they do not want to experience that hassle.
I accept that there could be cases such as those described by the hon. Gentleman where people are in genuine hardship. Therefore, the Director General of Electricity Supply has requested that electricity companies waive the charges in such cases. I am told that Yorkshire Electricity has agreed to do so and has included that in its code of practice.
The hon. Gentleman said that he wanted codes of practice, but that he was sceptical about how strong they would be. I hope that he will accept the good faith of the codes of practice and see how they work out. If he becomes aware of cases of hardship following the introduction of that measure, I hope that he will refer them to the director general, because he is just as concerned about genuine hardship cases. The hon. Gentleman may care to note that the penalty charges for late payment pre-date privatisation by a long way. Therefore, it is not fair to say that they are the result of a privatised management seeking to increase its profitability. They are a perfectly sensible response to a genuine business problem. If too many customers delay payment, it is disruptive and costly for the business.
The hon. Gentleman may care to note that there is good news on disconnections, which are even more worrying and threatening to the type of consumer about whom he and I are concerned. In 1976, there were 114,330 disconnections, and by 1990, that had dropped to 55,196, well below any figure achieved in the 1970s under the Labour Administration. I hope that he will welcome that and see that some things are getting better.
The hon. Member for Neath (Mr. Hain) repeated his point about the human right to have a telephone and the need for more people on low incomes to have access to the system. We debated that extensively in Committee. He is trying to under-sell British achievement. The penetration figure was 88 per cent. in 1990, but it has risen since then. I welcome, as he does, the great progress made in improving and increasing access to telephone use, ownership and rental over recent years.
In 1972, which was not long ago, only 42 per cent. of households had a telephone. It is well over double that level now, because we have introduced a system that enables the industry to have the resources and profits to invest in growth, and because the industry has introduced

the support line and low user rental rebate schemes which are imaginative and good schemes and much better than anything that was in existence before.
I think that the hon. Member for Neath finds himself at variance with this Front Bench spokesman. He got a little carried away in his peroration and said that he thought that our entire policy should be changed, yet the Front Bench spokesman said that he agreed with the idea of introducing competition and with many of our regulatory measures. In fact, much of new clause 1 supplements, in looser language, what we are already doing in existing legislation and in this Bill. I hope that the House will rest content with the Bill as tabled and as amended by the Government.

Mr. Rhodri Morgan: I want to deal particularly with new clause 7, which has not been dealt with so far. As we have found throughout the passage of the Bill, some of the matters are common to the different public utilities and, as a result, it is right to group them. However, that means some jumping about from electricity and gas in the energy sector to British Telecom in the trade and industry sector and to water and sewerage in the environment sector.
In many ways, new clause 7 is similar to new clause 1, but it deals specifically with electricity. It could be applied easily to gas, because it deals with the place of energy efficiency in any pricing or regulatory regime for any of the four great public utilities—particularly gas and electricity—in a monopoly position.
We are interested in the way in which energy efficiency should be encouraged in a monopoly public utility. Gas was privatised three years before electricity and has undergone a five-year review. I believe that the review will take effect in April 1992. In the negotiations between the regulator and the gas industry, the industry has accepted the proposal by Ofgas that there should be an E factor, or efficiency factor, in the way in which gas prices are changed year on year. In other words, an allowance will be made for an additional price rise per unit if the gas industry makes suitable efforts to reduce the number of units consumed.
The industry will split the difference with its consumers. If a utility introduces measures to help its customers to use less of its product, the customer will gain most of the benefit, but the industry will gain some benefit through the application of the E factor—a small increase on top of the retail prices index plus X minus Y, or whatever it may be. Also, there will be a contribution towards the reduction in the number of units used while raising the unit charge. That is admirable, except that it has taken five years to arrive.
In the new clause, we have asked for something that most people in the industry realise is inevitable—there will be an E factor for electricity. This is a rattling good idea for the gas industry, so why do we have to wait five years for it to be applied to the electricity industry? I hope that the Minister will revise the Government's rigid idea that it is fair dinkum for the City that, when a company is privatised, it must be left alone for about five years with a level playing field that keeps the investment institutions happy. That is nonsense.
The Government are about to agree all sorts of proposals with the European Community to encourage energy efficiency. They half agreed to the idea of carbon taxes during meetings in December with their EC


counterparts at Environment, Energy and Finance level. They are adopting all sorts of proposals for stabilising CO2 emissions, but they will not accept this good idea in case it offends their friends in the City. That is idiotic. They will have to revise their views shortly. It could be introduced in this Bill very simply, but they will not do it because of the "not invented here" problem and because they do not want to offend the investment institutions.
When this Bill had its Second Reading and went to Committee, the remaining shares in British Telecom had not been sold. I am sure that the Government were worried about offending the investment institutions that they needed to keep sweet in order to sell the remaining shares. Now that British Telecom has been sold, I hope that we will see a last-minute conversion, either here or in another place. I hope that they will accept the energy efficiency incentive for the electricity industry so that it can assist its consumers to reduce their consumption while being able to increase the unit charge and, thereby, reducing overall the bills for their consumers.
That is what we hope will happen, and that is what we promise will inevitably happen when we assume the powers of government. There is no time to lose on the environment front, and energy efficiency can make such a contribution to the environment that we hope the Government will have a deathbed conversion and, before the Bill receives the Royal Assent, will announce that they too will equalise the priority given to energy efficiency in the gas and electricity companies.
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What effect might that have on the electricity distribution companies' profits? It has been calculated that they now make a return of about 8 per cent., after allowing for inflation. That is a very high rate of return for monopoly public utilities. Most people seem to assume that a monopoly public utility ought to make a rate of return of about 5 per cent. after allowing for inflation, but our regional distribution companies make 8 per cent.—about 60 per cent. more than one would have expected. The Government have allowed profits to let rip, so there is a big margin which the companies should undoubtedly be asked to spend on improvements in energy efficiency. In the end, that would bring their profits down to what could be called normal profits for public utility companies.
The companies should not be making more than 5 per cent., taking the good years with the bad. We are in the middle of a recession, and this would not normally have been expected to be a good year. But the profits have been allowed to run freely, because we are still in the initial stages after privatisation. The Government have allowed the companies to do nothing more than mug the consumer. The Government have not created privatised companies in the conventional commercial sense; they have created pound note machines, which are beneficial for the shareholders and earn profits 60 per cent. higher than they should be, considering the nature of the companies and the protection from competition that their monopoly position gives them. People cannot have two sets of wires leading to the three-pin plugs in their homes.
Profits are far too high, and the surplus should be creamed off to assist with energy efficiency. That would be good for the environment and for consumers; the shareholders themselves, especially the large institutions, expect that to happen in the long run. But of course it cannot be allowed to happen yet, because that might upset

the merchant banks which advised the Government so ill on the privatisation of the distribution companies. It might even upset the regulator, because he, in effect, wrote the preparatory documents for electricity privatisation, and perhaps he would not yet like to admit how wrong he was.
I have some examples of what the Government have done in setting up what I call pound note machines rather than conventional commercial enterprises. I was interested to read the analysis of the top 500 European and British companies in Monday's Financial Times. The list was interesting, because it contained recently privatised companies. There was a special analysis of which 25 of the United Kingdom's top 500 companies had had the biggest profit increases in the past financial year.
Seven of those top 25 companies were recently privatised water or electricity companies. The third was Northumbrian Water, the fifth was Welsh Water, the seventh North West Water, the 10th Wessex Water Services, the 15th South Wales Electricity, the 23rd Yorkshire Water Services, and the 24th South West Water Services. Thus, of the 500 biggest British companies in terms of market capitalisation, seven of the 25 with the biggest percentage increases in profits were privatised utilities.
We can look at the figures another way. Seven of the 12 companies with the biggest increases in profits among the biggest 300 companies in Britain are recently privatised water or electricity companies. Top of the list for profit increases is Northumbrian Water; second is Welsh Water; third is North West Water; fifth is Wessex Water Services; seventh is South Wales Electricity; 11 th is Yorkshire Water Services; 12th is South West Water Services. More than half of the top profit rockets among the biggest 300 companies in Britain are recently privatised companies.
That is a staggering figure, and it shows, if we needed to be shown, the degree to which privatisation has been carried out so as to mug the consumer and benefit the shareholder—to stuff money into the pockets of City advisers and shareholders. The consumer has been left with nothing to gain and everything to lose from privatisation.
We have asked about standards of service. Why has the process of privatisation made it so easy for the companies to make profits 60 per cent. higher than what we could call the norm for monopolies? It has happened because the regulators cannot really know as much about the industry as the companies do. One can ask about the standards of service—for instance, why do such an unbelievably high number of consumers in south Wales have their electricity cut off?
I wrote recently to OFFER asking what it could do about the fact that we had paid an increase of 46 per cent. in the four years since the electricity privatisation White Paper was published in February 1988. It was the second highest price increase in the country—the increase in the south-west was the highest—yet Wales and the south-west also had the highest number of cut-offs. Standards of service were appalling, yet the price rises were the highest.
When I asked OFFER what it could do about that, the letter that I received in reply gave the companies' explanation—not OFFER's explanation but the companies' explanation, because the director-general of OFFER cannot know as much as the companies. The companies can always flannel; they can always find an Enid Blyton excuse, a little story to tell OFFER, and


OFFER passes that on to the Member of Parliament who is trying to do his job and look after the consumers in his area.
We need regulators with teeth, regulators with powers. We have not got them at the moment.

Mr. Redwood: The hon. Gentleman was discussing the desirability of an E factor. Will he clarify the size of E factor that would be necessary to achieve the kind of energy-saving programme that he wants?

Mr. Morgan: I thought I had given an explanation of the kind of E factor that we would seek. We would keep the price of electricity stable in cash terms but would order, by way of a code of practice, that the difference between a 5 per cent. rate of return, after allowing for inflation, and the 8 per cent. return now being earned by the 12 regional electricity companies in England and Wales should be spent on improvements in energy efficiency on their customers' premises—for instance, by providing low-energy light bulbs, loft insulation or draught-proofing. That is not uncommon in the United States, and it would be sensible here. Either electricity prices could be reduced so that the companies earned a real rate of return of roughly 5 per cent., or prices could be left at today's levels, whereby the companies earn 8 per cent., and the companies could be told to spend the extra money on energy efficiency.
That would achieve some of the Government's objectives over the next three or four years—catching up for the benefit of consumers, but catching down, as it were, in terms of the roaring rates of return now being earned.
Let us return to the subject of how strong we want to make the regulators. We did not contest the Bill on Second Reading because we approve of the regulators' powers being roughly the same in the four big public utilities, but we are anxious to ensure that the regulators have a strong commitment to regulating the industries and use the statutory powers that they are given.
Considering the history of the four public utilities, one could say that we are looking for regulators who have the statutory powers that Stephen Littlechild has in the electricity industry, combined with Ian Byatt's brains and James McKinnon's teeth. Some such composite regulator is needed providing the best of the three worlds—I always leave out telecoms because I am no expert on that industry.
We all take an interest in seeking some sort of regulator who will do something for the consumers rather than take the company's view 90 per cent., of the time. We have seen in the gas industry the regulator doing something for the consumer. Perhaps that is because James McKinnon was not involved in the process of privatisation but was found subsequently. Ian Byatt and Stephen Littlechild are severely inhibited by the fact that they virtually wrote their own job descriptions by being so involved in the process of privatisation as political advisers or, in the case of Ian Byatt, civil servants at the Treasury. They do not seem to know quite how to use their powers to compel the industry to do what is necessary to defend the consumers' interest.
I have outlined how we see the need to strengthen the regulators and make them far more independent of the industry and far less tied up with the wish not to create antipathy in the City or the investment community for the next round of privatisation. We want someone who regards is as his one plain and simple job to look after the consumers of the four major utilities. Whether the

Secretaries of State for Energy, the Environment or Wales like it, that will be the job to which he is 100 per cent. committed. That is the type of person whom we shall appoint. The four utilities need stronger powers to protect the consumer.

Mr. Redwood: With the leave of the House, I shall respond to the points that the hon. Member for Cardiff, West (Mr. Morgan) has made.
One of the main ways in which energy usage can be made more efficient is to improve and change the system of generation. Of course, that is exactly what competition and the changes in the industry are doing. The substitution of combined cycle gas projects for the old coal-steam projects that dominated the industry prior to privatisation will make a large difference. As the hon. Gentleman is aware, the thermal efficiency of those new stations is greatly superior to that of the old type of station that was constructed by the nationalised industry.
The hon. Gentleman may be well aware that the Office of Electricity Regulation has issued codes of practice on the matter about which he is worried. Of course, section 3 of the Electricity Act 1989 requires the promotion of efficiency and economy in the use of electricity. The Bill before the House tonight gives new powers to the Director General of Electricity Supply to require electricity suppliers to inform customers of standards set and achieved for energy efficiency.
I am not surprised that the hon. Gentleman has discovered that the privatised companies have done well. They have done well and increased their profitability against the background of firm price regulation and control. The reason why they have done well is that they now have the incentive to do so. They are raising their productivity in a way that they never did under Labour Governments and nationalisation. So my hon. Friends would have been surprised if the electricity companies had not figured prominently in the list of companies showing considerable improvements and better profitability. The hon. Gentleman's attack on both Mr. Littlechild and Mr. Byatt was unfair. They are extremely good regulators, and their contribution to the development of regulatory styles and techniques in Britain and throughout the world is extremely important.
Professor Littlechild's development of the formula of simple price control based on the retail prices index and an adjustment to take account of fuel costs and efficiency in the industry is being monitored and adopted elsewhere in the world because it is an extremely good way of regulating an industry and offering a pledge and a promise to the customer. That pledge matters to the customers because it is a pledge on the price of the goods or service that they will receive.
I urge the House to reject the new clause. It is unnecessary. The Director General of Electricity Supply has the powers that he needs. His consultative document has set out several ideas, including an E factor. We are happy to trust his judgment, and he does not want the powers in the Labour party's new clause.

Question put, That the clause be read a Second time:—

The House divided: Ayes 124, Noes 204.

Division No. 39]
[6.13 pm


AYES


Adams, Mrs Irene (Paisley, N.)
Anderson, Donald


Allen, Graham
Archer, Rt Hon Peter


Alton, David
Armstrong, Hilary






Ashton, Joe
Illsley, Eric


Barnes, Harry (Derbyshire NE)
Ingram, Adam


Barron, Kevin
Johnston, Sir Russell


Battle, John
Kilfoyle, Peter


Beckett, Margaret
Kinnock, Rt Hon Neil


Beggs, Roy
Leadbitter, Ted


Bellotti, David
Leighton, Ron


Benn, Rt Hon Tony
Lewis, Terry


Bennett, A. F. (D'nt'n &amp; R'dish)
Livsey, Richard


Blunkett, David
McAllion, John


Bray, Dr Jeremy
McAvoy, Thomas


Brown, Gordon (D'mline E)
Macdonald, Calum A.


Brown, Nicholas (Newcastle E)
McFall, John


Brown, Ron (Edinburgh Leith)
McKay, Allen (Barnsley West)


Caborn, Richard
McKelvey, William


Callaghan, Jim
Madden, Max


Campbell, Menzies (Fife NE)
Maginnis, Ken


Campbell, Ron (Blyth Valley)
Mahon, Mrs Alice


Carlile, Alex (Mont'g)
Marshall, Jim (Leicester S)


Carr, Michael
Maxton, John


Clarke, Tom (Monklands W)
Meacher, Michael


Clwyd, Mrs Ann
Meale, Alan


Cook, Frank (Stockton N)
Michie, Bill (Sheffield Heeley)


Cook, Robin (Livingston)
Michie, Mrs Ray (Arg'l &amp; Bute)


Corbett, Robin
Molyneaux, Rt Hon James


Cox, Tom
Morgan, Rhodri


Crowther, Stan
Morley, Elliot


Cryer, Bob
Morris, Rt Hon A. (W'shawe)


Dalyell, Tam
Mowlam, Marjorie


Davis, Terry (B'ham Hodge H'l)
Mullin, Chris


Dixon, Don
Nellist, Dave


Dobson, Frank
Orme, Rt Hon Stanley


Dunwoody, Hon Mrs Gwyneth
Powell, Ray (Ogmore)


Eadie, Alexander
Primarolo, Dawn


Edwards, Huw
Rees, Rt Hon Merlyn


Enright, Derek
Rogers, Allan


Ewing, Mrs Margaret (Moray)
Rooker, Jeff


Faulds, Andrew
Ruddock, Joan


Field, Frank (Birkenhead)
Sheerman, Barry


Fields, Terry (L'pool B G'n)
Sheldon, Rt Hon Robert


Flannery, Martin
Short, Clare


Flynn, Paul
Skinner, Dennis


Foster, Derek
Smith, Andrew (Oxford E)


Garrett, Ted (Wallsend)
Smith, C. (Isl'ton &amp; F'bury)


George, Bruce
Snape, Peter


Gordon, Mildred
Spearing, Nigel


Gould, Bryan
Stephen, Nicol


Graham, Thomas
Strang, Gavin


Grant, Bernie (Tottenham)
Thompson, Jack (Wansbeck)


Griffiths, Nigel (Edinburgh S)
Turner, Dennis


Griffiths, Win (Bridgend)
Wareing, Robert N.


Grocott, Bruce
Watson, Mike (Glasgow, C)


Hain, Peter
Welsh, Michael (Doncaster N)


Hattersley, Rt Hon Roy
Williams, Rt Hon Alan


Haynes, Frank
Williams, Alan W. (Carm'then)


Henderson, Doug
Wise, Mrs Audrey


Hinchliffe, David
Worthington, Tony


Hood, Jimmy



Howarth, George (Knowsley N)
Tellers for the Ayes:


Howells, Dr. Kim (Pontypridd)
Mrs. Llin Golding, and Mr. Ken Eastham.


Hughes, Simon (Southwark)



NOES


Arbuthnot, James
Buck, Sir Antony


Arnold, Jacques (Gravesham)
Budgen, Nicholas


Baker, Nicholas (Dorset N)
Burns, Simon


Baldry, Tony
Burt, Alistair


Bellingham, Henry
Butterfill, John


Benyon, W.
Carlisle, John, (Luton N)


Bevan, David Gilroy
Carrington, Matthew


Blaker, Rt Hon Sir Peter
Carttiss, Michael


Body, Sir Richard
Channon, Rt Hon Paul


Boswell, Tim
Chapman, Sydney


Bottomley, Peter
Chope, Christopher


Bowis, John
Clark, Rt Hon Alan (Plymouth)


Braine, Rt Hon Sir Bernard
Clark, Dr Michael (Rochford)


Brandon-Bravo, Martin
Clark, Rt Hon Sir William


Brown, Michael (Brigg &amp; Cl't's)
Colvin, Michael


Browne, John (Winchester)
Conway, Derek


Bruce, Ian (Dorset South)
Coombs, Anthony (Wyre F'rest)





Coombs, Simon (Swindon)
Lightbown, David


Cormack, Patrick
Lloyd, Peter (Fareham)


Currie, Mrs Edwina
Lord, Michael


Davies, Q. (Stamf'd &amp; Spald'g)
Luce, Rt Hon Sir Richard


Davis, David (Boothferry)
MacGregor, Rt Hon John


Day, Stephen
MacKay, Andrew (E Berkshire)


Devlin, Tim
Maclean, David


Dickens, Geoffrey
McLoughlin, Patrick


Douglas-Hamilton, Lord James
McNair-Wilson, Sir Michael


Dover, Den
McNair-Wilson, Sir Patrick


Dunn, Bob
Malins, Humfrey


Durant, Sir Anthony
Mans, Keith


Dykes, Hugh
Marlow, Tony


Eggar, Tim
Marshall, Sir Michael (Arundel)


Evans, David (Welwyn Hatf'd)
Martin, David (Portsmouth S)


Evans, John (St Helens N)
Mates, Michael


Evennett, David
Maude, Hon Francis


Fallon, Michael
Maxwell-Hyslop, Sir Robin


Farr, Sir John
Mellor, Rt Hon David


Favell, Tony
Meyer, Sir Anthony


Fenner, Dame Peggy
Miller, Sir Hal


Fishburn, John Dudley
Mills, Iain


Fookes, Dame Janet
Mitchell, Andrew (Gedling)


Fornnan, Nigel
Moate, Roger


Forsyth, Michael (Stirling)
Morris, M (N'hampton S)


Forth, Eric
Morrison, Rt Hon Sir Peter


Fox, Sir Marcus
Moss, Malcolm


Franks, Cecil
Moynihan, Hon Colin


Freeman, Roger
Nelson, Anthony


French, Douglas
Neubert, Sir Michael


Gale, Roger
Nicholls, Patrick


Gardiner, Sir George
Nicholson, David (Taunton)


Garel-Jones, Rt Hon Tristan
Nicholson, Emma (Devon West)


Glyn, Dr Sir Alan
Norris, Steve


Goodhart, Sir Philip
Onslow, Rt Hon Cranley


Goodlad, Rt Hon Alastair
Oppenheim, Phillip


Gorman, Mrs Teresa
Owen, Rt Hon Dr David


Grant, Sir Anthony (CambsSW)
Page, Richard


Greenway, John (Ryedale)
Paice, James


Gregory, Conal
Pattie, Rt Hon Sir Geoffrey


Griffiths, Peter (Portsmouth N)
Pawsey, James


Grist, Ian
Peacock, Mrs Elizabeth


Ground, Patrick
Porter, Barry (Wirral S)


Hague, William
Porter, David (Waveney)


Hamilton, Rt Hon Archie
Portillo, Michael


Hamilton, Neil (Tatton)
Powell, William (Corby)


Hampson, Dr Keith
Raison, Rt Hon Sir Timothy


Hannam, Sir John
Rathbone, Tim


Harris, David
Redwood, John


Haselhurst, Alan
Rhodes James, Sir Robert


Hayes, Jerry
Rowe, Andrew


Hayhoe, Rt Hon Sir Barney
Ryder, Rt Hon Richard


Hayward, Robert
Sackville, Hon Tom


Heathcoat-Amory, David
Shaw, David (Dover)


Higgins, Rt Hon Terence L.
Shaw, Sir Giles (Pudsey)


Hind, Kenneth
Shaw, Sir Michael (Scarb')


Hordern, Sir Peter
Shepherd, Colin (Hereford)


Howarth, G. (Cannock &amp; B'wd)
Sims, Roger


Howe, Rt Hon Sir Geoffrey
Skeet, Sir Trevor


Hughes, Robert G. (Harrow W)
Smith, Tim (Beaconsfield)


Hunt, Rt Hon David
Speller, Tony


Hunt, Sir John (Ravensbourne)
Spicer, Sir Jim (Dorset W) 

Hunter, Andrew
Squire, Robin


Irvine, Michael
Stanley, Rt Hon Sir John


Jack, Michael
Steen, Anthony


Jackson, Robert
Stern, Michael


Janman, Tim
Stevens, Lewis


Johnson Smith, Sir Geoffrey
Stewart, Andy (Sherwood)


Jones, Gwilym (Cardiff N)
Sumberg, David


Kellett-Bowman, Dame Elaine
Taylor, Ian (Esher)


Key, Robert
Taylor, Sir Teddy


Kilfedder, James
Tebbit, Rt Hon Norman


King, Roger (B'ham N'thfield)
Thompson, Sir D. (Calder


Kirkhope, Timothy
Valley)


Knapman, Roger
Thompson, Patrick (Norwich N)


Knight, Greg (Derby North)
Thorne, Neil


Knight, Dame Jill (Edgbaston)
Tracey, Richard


Lawrence, Ivan
Twinn, Dr Ian


Lee, John (Pendle)
Waldegrave, Rt Hon William


Lester, Jim (Broxtowe)
Waller, Gary






Ward, John
Wood, Timothy


Warren, Kenneth
Woodcock, Dr. Mike


Watts, John
Yeo, Tim


Wells, Bowen
Young, Sir George (Acton)


Wheeler, Sir John



Whitney, Ray
Tellers for the Noes:


Widdecombe, Ann
Mr. John M. Taylor and Mr. Irvine Patrick.


Winterton, Nicholas

Question accordingly negatived.

New Clause 2

ELDERLY AND DISABLED CUSTOMERS

'The following section shall be inserted in the Telecommunications Act 1984. after section 7(4)—
New Section 7(5)

(1) A licence granted under this section shall require the licence holder to produce a Code of Practice describing their services for elderly and disabled customers.

(2) A Code of Practice prepared under subsection (1) above may only be made after—

(i)consultation with, and approval of, the Director
(ii) consultation with persons or bodies representative of elderly and disabled people.".'.—[Mr. Henderson.]

Brought up, and read the First time.

Mr. Henderson: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker (Miss Betty Boothroyd): It will be for the convenience of the House to debate the following amendments to the new clause: No. 1, in clause 1, page 3, line 14, after 'performance', insert
'including household penetration services for the disabled, and the balance of regional infrastructure development.'.
No. 2, in clause 6, page 7, line 14, at end insert
'27HA The criteria settled under section 27H above shall provide that disabled people and people of pensionable age shall be exempt from the requirement to pay a deposit.'.

Mr. Henderson: May I begin by explaining to the House the purpose of the clause and amendments before it? New clause 2 deals with the introduction of a ode of practice in utilities governing facilities for elderly people and for disabled people. Amendment No. 2 deals with deposits in regard to facilities for pensioners, and amendment No. 1 relates to a number of issues in connection with the standards of performance which a regulator will in future require an operator to meet—a subject which the House has already discussed to some extent in a previous set of amendments. Most of my comments relate initially to amendment No. 1.
If there is a particular virtue of the Bill, it is that the Government have recognised that privatisation of public utilities in itself is inadequate as a means of improving services and developing the utilities, and that, where a private monopoly has replaced a public monopoly, there is an ever-increasing need for the public interest to be recognised and to be represented in some way. There is a growing consensus in the House—already acknowledged in the debate—that the important way of representing the public interest is to make sure that a regulator is appointed and, that the regulator has teeth to make things happen in the industry.
There has therefore been a fairly discernible change in the perception of the Government of the benefits that can accrue from privatisation. Some might argue that it is a transformation in Government thinking, and the Minister may be able to confirm whether that is his view or whether

he believes that it is just a turning back in Government thinking, slightly away from a purely ideological position to one that reflects the actualities of running a utility and providing a service which is desired and needed by the community.
It is on the record this evening that the Government have accepted the need to improve the status of and give greater powers to the regulator, and that one of the crucial powers of any regulator is that of determining the general standards of performance expected of a utility in the delivery of its service. The issue before us now is whether the Bill as currently constructed has sufficient teeth to enable the regulator to undertake his or her responsibilities in the regulation of those utilities.
I suggest that elements of clause 1, dealing with standards of performance, are too timid. They leave the regulator exposed to undue pressure from the private utilities and their supporters. They do not give the regulator sufficient power to say to the utility, "When I talk about standards of performance, I mean specific things." There should not be an argument on the core of what matters regarding standards of performance. There will always be scope for interpretation at the periphery, but, when dealing with core standards, the regulator should be able to tell the utility what matters and what is on the agenda, and that they affect everything in the negotiations, whether it is the provision of services or the prices paid for them.
6.30 pm
The purpose of amendment No. 1 is to lay down three items of importance to the regulator when dealing with telecommunications. The Government have made the jump from thinking that privatisation was all that mattered to recognising that privatisation in itself does little to improve the performance of utilities and that, where a private monopoly exists—as it essentially does in telecommunications—a regulator is required to protect the public interest. Is it not appropriate for the regulator to have pre-designated issues that affect standards of performance?
I hope that every hon. Member understands that, until every residential property is linked to a telephone service, one cannot begin to provide the software and the other services which can benefit the individual or society. One cannot provide those without establishing the basic physical link. I hope that, in acknowledging that technical point, the Government will go further and recognise that it is important for us to give the highest priority to establishing that link to every residential premises. Virtually all business premises are connected. Twenty years ago, we had a comparative advantage over some other countries because of our level of telephone penetration, but we are beginning to fall behind, even taking into consideration the changes made in the past few years.
In Germany, more than 91 per cent. of residential premises are connected by a fixed-link telephone. In the United States of America, more than 93 per cent. have such a connection, and in France the figure is 98 per cent. However, in Britain, as the Minister told us earlier, the figure is 89 per cent. In 1988, it was 87 or 88 per cent. Whichever figure we take, there is clearly a gap between the level of provision in this country and that in comparable industrial nations. When beefing up the powers of the regulator and setting performance


standards, it is crucial that the House recognises the necessity of giving the regulator the power to extend levels of telephone penetration.
Surely the regulator should be able to insist that those providing telephone services should reconsider the amount of deposit required, as my hon. Friend the Member for Neath (Mr. Hain) said. Is the present level of deposit appropriate in the circumstances? Does it deter many people from taking the opportunity to have a telephone?
The regulator should be able to consider the cost of installation, which is way in excess of such costs in many comparable countries. Are those charges appropriate if we are trying to extend telephone penetration?
The regulator should consider the cost of local calls. Many people who want a telephone because they want that essential link with the outside world would mainly make local calls, yet they know that in this country the cost of those calls is way in excess of their cost in competing industrial nations. They know it instinctively even if they have not studied the statistics.
I hope that the Government will be able to decide that the regulator should study the industry and developments taking place, including the aspects that the Minister referred to, such as developing the provision of local loops through cable companies and others. If such developments take place, is it not essential that British Telecom, which will incur the largest burden in having to provide extensions to households throughout the country, is able to agree a price relationship with other companies that link into the BT system? That would enable everyone in the industry to play their part in extending the telephone service.
Is it not right that the regulator should encourage the various providers to extend telephone services? In that way, the potential profits, to which my hon. Friend the Member for Neath referred, could become reality. There will only be potential for those organisations which want to use BT's facilities or for BT itself to accrue such profits once there is a telephone in every residential premises.
In the past 40 or 50 years, and especially in the past 10 years, there have been serious regional disparities in economic activity in this country. Is it not appropriate for a nation with that background to put high on its agenda the provision of essential infrastructure, so that there can be a good spread of resources and investment throughout the regions? To some extent, that has already happened in the highlands of Scotland, where modern facilities have been introduced with the help of European funding, which has helped the small business community in the more remote areas. That is one good example. Surely the regulator should be given the responsibility of making that a top priority in discussions with various operators about the standards of performance essential to developing the telecommunications structure.
As we discussed facilities for the aged and the disabled extensively in Committee, I do not want to labour the point, but I want to establish the principle that a utility is not like any other company that provides a service or goods. A utility provides a core service for the community—a service on which everyone depends, whether it is electricity, gas, a telephone or water. There is something different about those commodities and the Government have recognised that fact because they are moving towards regulation. Surely, when providing those services, a special case can he made for establishing special facilities for the aged and the disabled—such as, for example, the provision

of a coupler attached to the telephone so that the 3 million people who are hard of hearing have a better opportunity to use the telephone.
There might be a need for liaison between British Telecom and a local Department of Social Services office about the advantages of a mobile phone with a limited range for pensioners in a fragile physical state, so that, if they fall, they do not lie on the floor for hours because they cannot reach the fixed-link telephone on the wall. Often such facilities are made available by the operator, but the regulator should have the responsibility to ensure that operators have a code of practice which includes such provisions. That is merely one example, which good operators would probably want to provide of their own free will. However, that does not mean that there is no need for legislation.
Not every operator will always operate to the highest standards. Some new operators wishing to enter the business might not have the same social conscience as operators have demonstrated in the past. That is another reason why standards of performance need to be designated by the regulator.
If they are consistent with what they said in Committee, the Government will argue that the regulator already has the power to make those matters count in his or her negotiations with the operator in establishing a price regime. My answer is to ask why, if the regulator already has the power, it is necessary to have the Bill which identifies that the standards of performance must he a crucial element in determining whether the activities of an operator are acceptable to the regulator. If the Government have jumped that gap and reached the point where they accept that standards of performance are crucial, surely they should go that little bit further and identify the important standards of performance that will affect the future of the industry and the needs of consumers.
There is advantage in being specific. If our proposal is accepted, it will give the regulator much greater scope to do what he or she currently wants to do. I hope that the regulator would want the things that I have referred to included as important priorities by the operator. The Opposition proposal would give more power to the regulator's elbow in negotiations to force change upon the operators.
If clause 1 is to have more teeth, and if the Government are to convince the public that they are serious about regulation, they should accept that the new clause and the amendments being discussed with it are reasonable. If the Government fail to accept the changes, and if similar amendments are not accepted in another place, people will begin to ask just what kind of citizens charter we have. They will want to know whether it is a real citizens charter with teeth which, in the case of telecommunications, can do something about extending the telephone service to the 13 per cent. of the population who do not have a telephone, which can spread investment in the industry throughout the regions and which can establish strict codes of practice to assist disabled and aged people. People will want to know that the citizens charter regards such issues as important. If the Government want the citizens charter to be credible, they have an obligation to accept the new clause and the amendments.

Sir John Hannam: I should like to speak to amendment No. 2, tabled in my name and the names of


other hon. Members from the all-party disablement group. The amendment relates to the deposit which is required before a telephone can be installed. The deposit is of tremendous importance to disabled people and the aged. The amendment seeks to give them exemption from deposits for telephone services.
The citizens advice bureaux—I am sure that we are all great admirers of the work they do throughout the country—are particularly anxious that the exemption is given, because they are in the front line in dealing with the numerous cases of clients who are unable to afford the deposit and installation cost of several hundred pounds which are asked of them.
The CABs very much welcome many of the Bill's provisions, which will assist them greatly. They and the disability organisation, RADAR, also welcome the Government's attempt to regulate the criteria relating to deposits and particularly the upper ceiling of £150 placed by British Telecom on deposits for its customers. However, I share their belief that, for very elderly and disabled people, particularly housebound disabled people, a telephone is an essential service. It is more often a lifeline than a luxury.
Telephones provide the link not only with the medical and paramedical support that disabled people need but also with social services, family and friends, all of whom may be necessary in an emergency. In addition, we all know that most disabled people have lower incomes, yet have to pay higher costs than the non-disabled. They have to pay extra for heating, laundry, clothing and medicines. It is punitive for them to have to pay a deposit on what for many is an essential piece of equipment for everyday life.
We all know that, in today's society, the telephone plays a pivotal role in interactive communications. The services that can be accessed via the telephone often provide disabled people with the ability to function in mainstream life when inaccessible buildings would deny them that ability. It is important that disabled people are automatically exempt from telephone deposit charges so that that channel of communication and access is not barred to them.
6.45 pm
A couple of cases from CABs will illustrate the point. The first involves a couple in Greater Manchester who are on income support. They were recommended by their general practitioner to have a telephone installed. They were asked to pay a £150 installation cost plus a £200 deposit. They could not afford those amounts. In another case, in the Chilterns, an elderly disabled pensioner wished to have a telephone installed. As a new subscriber, the pensioner was asked to pay a deposit of £350, which he was unable to pay. After negotiation, British Telecom would only reduce the deposit to £200, which was still far in excess of what the pensioner could afford.
Under the electricity and gas legislation, it is already a statutory requirement that particular regard shall be paid to the needs of elderly and disabled people. Under the Telecommunications Act 1984, British Telecom is required to design special services for disabled consumers. I pay tribute to it for the technology which it has introduced and the practical changes which it has made over the last few years.
The amendment would be a logical extension of existing statutory duties to assist disabled people to lead as normal lives as possible and to be protected in emergencies. In the spirit of the Government's community care policies, I hope that the principle will be accepted and that the necessary changes will be made to the Bill, probably when it reaches the other place.

Mr. Alex Carlile: I too should like to make a brief intervention on amendment No. 2. I agree with everything that has been said by the hon. Member for Exeter (Sir J. Hannam), but I should like to put a slight gloss on the matter in relation to two issues: first, the very elderly and, secondly, the problem of the very elderly living in rural areas. In my constituency there is a high proportion of elderly people; that applies throughout rural Wales and similar rural areas.
In rural Montgomeryshire there are approximately 6 per cent. more elderly people than in the average rural district in the United Kingdom. We are proud of our elderly population. It is a fact that in areas like Montgomeryshire people live longer because the climate is pleasant and the way of life is perhaps a little more peaceful. Certainly the work that the people have done over the years has tended to be more healthy than working in the House and in many other more sedentary occupations.
The average rural village, certainly in my part of Wales, tends to be high, somewhat isolated, with little or no public transport. Although unemployment is low, wages tend to be low, too. Usually people want to stay. if they can, when they become very old.
Care in the community is doing well by and large in rural mid-Wales, and the Government are to be commended for the emphasis that has been placed on trying to ensure that elderly people retain their independence for as long as possible. In my Christmas round of hospitals and old people's homes, both public and private, I noticed that their population had aged, with the average age of the residents being much higher than it was some years ago. The reason is simply that more elderly people can stay in their own homes. They are being provided with home helps, nursing care and the excellent general practitioner care.
Medical care in rural Wales is of an exceptionally high standard and is an example to other parts of the country, but because there is no public transport and people can become isolated and lonely—an emotional viewpoint which becomes overwhelmingly subjective as they become much older, perhaps being widowed—it is essential for them to have the one means of communication which can keep them in touch with the outside world on a person-to-person basis. The television tells them what is going on in the outside world, but does not enable them to speak directly to anybody.
A deposit for an elderly person who may have done without a telephone until becoming older, as is common in rural Wales, may be too much to meet. The great majority of pensioners in my constituency do not have occupational pensions. They do not complain about that. They just get on with life and live on their state pension, and they manage surprisingly well, considering the level of the pension. But when the time comes and they are isolated and must choose between going into an old person's home


—possibly going into a council pensioner's bungalow—and staying in their own home, their ability to communicate with other people is a key factor.
It would be consistent with Government policy for care in the community to say that if not for all pensioners—amendment No. 2 perhaps aims high in that respect—at least for pensioners who are 75 or over, telephones should be provided without a deposit having to be provided. I hope that the Government will give a sympathetic response on that point.

Mr. Redwood: I am grateful to hon. Members who have contributed to the debate for the sympathy that they have shown to disabled people, and of course the Government and the regulator wish to see progress made in providing the right kind of services to such groups of people.
I remind hon. Members that under the telecommunications legislation, the director general has a duty to promote the interests of consumers, purchasers and other users in the United Kingdom, including, in particular, those who are disabled or of pensionable age. That is the first requirement in section 3, which lays down the duties. The director is also obliged by section 54 to set up a body to advise him on matters affecting the disabled and elderly.
Disabled and elderly people are specifically covered in British Telecom's general code of practice, and the director general has established a committee to advise him on their needs. Licence condition 31 requires BT to consult the director general from time to time about the supply and connection of apparatus for the disabled. Condition 32 requires BT to ensure that telephones with sound amplification facilities and telephones capable of being inductively coupled to hearing aids are available. BT also provides a wide range of other services, and has established an action for disabled customers' department to help it meet the needs of the disabled. It has also issued a publication setting out in detail the facilities it has to offer people with difficulties who need special treatment.
The regulator has not been inactive. He obtained a change in British Telecom's policy on deposits which was announced in August, and I am grateful to my hon. Friend the Member for Exeter (Sir J. Hannam) for mentioning that favourably. The House might wish to know some of the detail. As a result of that change of policy by BT, there are now four new categories of customer and customers seeking different kinds of service.
The first comprises those who need pay no deposit—that is a large category—being those who have had a BT service in the past and have paid their bills when requested. They will rarely be required to pay a deposit. One would be requested only if there had been some other problem, relating to their credit-worthiness, which had cropped up more recently. So, many people are asked for no deposit because they have been past customers and there has been no problem with their credit rating.
There are then three categories—low, medium and high risk. The—low risk new customer is asked for a deposit of £75; the medium risk, £100; and the high risk, £150, as my hon. Friend the Member for Exeter mentioned. About 40 per cent. of new customers pay a deposit. Such deposits are repaid, with 9 per cent. interest after a year.
I am, of course, concerned if it is felt that that is still an impediment to disabled people who need access to the service and are not an extreme credit risk to BT. If a customer is asked for a deposit and is unhappy with the position, he can go to the director general. This legislation

will be of assistance, because the director general may decide, with his duties under the telecoms legislation and given the new powers that this measure will give him, that he wishes to influence the decision by BT.
I should like to see the system in operation before going all the way with my hon. Friend the Member for Exeter and Opposition Members in their proposals. I shall make sure that, on this important issue, the strong feelings of hon. Members are relayed to the director general in the context of his general powers for disabled people.

Mr. Hain: I appreciate the sympathetic response that the Minister is giving. Is he aware that, in addition to the deposit charge levels which he has identified, there is a connection charge in respect of telecommunications of £163? In other words, people are being asked to find a great deal of money. That double charge is the key problem.

Mr. Redwood: I am grateful to the hon. Gentleman for that intervention, and I agree that it can make things difficult, as my hon. Friend the Member for Exeter implied. A deposit of £150, or even more before the new policy was introduced, on top of the full connection charge, represented a substantial sum. I suggest that the right approach is to start with the deposit, which is what the director general has been doing as a result of that new policy of BT. I hope that I have helped the House by what I have said about how we would like to see the director general use his powers and how he may wish to be involved in some cases where difficulties still arise.
The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) asked whether there had been a latter-day conversion or U-turn by the Government in seeking stronger regulatory powers. Not at all. The bulk of the regulatory powers are already in existing legislation. The Bill looks at those powers in the light of experience and brings the powers of all the regulators broadly up to the level of the best in the different pieces of legislation evolved over time for the various industries.
The Government have always said that there will be large monopoly areas in many industries for the foreseeable future and that those areas need careful regulation in the customer interest, as we have identified in previous debates. We have also said that we believe that the best regulator of all is competition. That is why we have taken measures to promote competition, and as competition builds up, our point will be even better established that competition is the customer's best friend and can provide an excellent deal on price, service quality and range of services available.
BT already sets out its services for disabled customers, and the regulatory framework does much of what the House is seeking to achieve in this short debate. So, while expressing much sympathy with the aims of some hon. Members, I suggest that the new clauses are not required and that the director general should get on with his work in the way I have described.

Question put and negatived.

New clause 8

GENERAL OBLIGATIONS OF UNDERTAKERS

`( )—(1) In section 68 of the Water Industry Act 1991, subsection (3) shall be omitted and there shall be substituted—

"(3) An undertaker shall be in breach of his duty under subsection (91)(a) above if water is unwholesome, or becomes unwholesome, at any point along a pipe supplying the premises concerned, unless—

(a) the unwholeness arises from a leak which is the responsibility of the occupier, or
(b) the occupier, or a person on his behalf, has wilfully or negligently caused damage to the pipe and such damage has caused the unwholesomeness.".'.—[Mr. Win Griffiths.]

Brought up, and read the First time.

7 pm

Mr. Win Griffiths: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this we may take the following: New clause 9—Responsibility for sewage pipes—

'( )—(l) In section 98 of the Water Industry Act 1991, after subsection (1) there shall be inserted—
(1A) A sewerage undertaker shall remedy any defect in a sewer to which this section applies at any point along the whole such length of the pipe, unless any such defect arises from wilful or negligent damage caused to the pipe directly by an occupier of any premises to which the pipe is connected.".'.

Amendment No. 4, in clause 24, page 20, line 15, at end insert—
`(aa) the number, length and location of pipes in the area of each undertaker through which drinking water is supplied to domestic and non-domestic premises which contribute to a deterioration in the quality of water supplied particularly when it could be a public health hazard;'.
Amendment No. 5, in page 20, line 19, at end insert
'including the wholesomeness or otherwise of water supplied in accordance with section 68 of the Water Industry Act 1991 as amended.'.

Mr. Griffiths: New clauses 8 and 9 bring an important new principle into play. At present, the customer is responsible for the pipe from the main to the property. In the case of a terrace house the length could be a metre or two; in some cases it is the length of a garden; in others it can be at least the length of a lane. The Government are responsible for ensuring that tap water quality meets the standards set out in the European Community directive. The water and sewerage undertakers are responsible, on behalf of the Government, for ensuring that the standards are adhered to, and we believe that they should be responsible for the entire length of pipe to a customer's tap or toilet. The Government should accept that the undertakers will assume that responsibility. However, the new clauses contain the proviso that, if a customer can be shown to have been negligent about the care of pipes under his property, he should bear the cost of dealing with any resulting problems in respect of the quality of water or sewerage. That is a fairly straightforward principle.
In this group of amendments, we make the point that the director general should collect information about any water-carrying pipes that, in themselves, could cause a deterioration of water quality, which, in turn, could be harmful to the consumer. In this respect there are two important contaminants or pollutants. One of them is lead, and there is a well established link between the presence of lead in water and brain damage, particularly in the case of young children. Indeed, this theory has an historic and well established pedigree."The History of the Decline and Fall of the Roman Empire" could have been shortened considerably if Gibbon had simply pointed out

that it was the magnificent lead-lined water systems of the Romans that did so much damage to their intellectual powers.
Lead is the first problem in respect of which the director general should collect information about pipes that can cause damage to the health of consumers—information to be made publicly available. In this country there are about 2 million people who drink water that fails to meet the EC standard of 50 micrograms per litre. This is clear from samples taken by the water inspectors.
The figure of 2 million does not include children and adults who go to the old schools and hospitals that still exist. Medical research has demonstrated that lead levels above the EC figure of 50 micrograms per litre, in combination with exposure from other sources, can result in blood lead levels that have adverse biochemical effects, including interference with the formation of red blood cells. That is why we are keen to establish for consumers a list of the places in which these offending pipes are to be found. Samples that were taken in 1988 and 1989 indicated that, in the country as a whole, almost one quarter of water zones did not comply with the EC limit of 50 micrograms per litre. Thus, lead is a widespread and serious problem.
The other pipes that give rise to concern are those that are lined with coal tar pitch. Most of them are old mains, and they are to be found principally in the Thames water authority area, particularly in and around London, and to a certain extent in the south-west water area. In England and Wales 102 water zones are affected. Over a period, the water combines with the coal tar pitch to produce chemicals known as polycyclic aromatic hydrocarbons. These are extremely deadly chemicals, and under EC regulations only 0·2 of a mocrogram per litre of water is allowed.
As it is a cancer-causing agent, the consumer has a right to know exactly where such mains are and whether there is a potential problem. Altogether, it affects about 4 per cent. of water zones, which in the last two years for which measurements were taken had levels which exceeded the EC limit for polycyclic aromatic hydrocarbons. That is why we want the water companies to take full responsibility, as the Government's agents in this matter, for meeting the standards of the EC water quality directives and why, in these two particular cases of which there is public knowledge, the damaging effect on people's health of lead pipes and of coal-tar, pitch-lined pipes, should become public knowledge and information on these matters should be collected and printed.
I shall be returning to the more general question of our water supplies and our beach and river water quality standards when looking at some later amendments, and also to some more specific problems relating to lead.
I hope that the Government can respond positively by saying that the water undertakers will accept this responsibility for pipes, right to the customers' taps and toilets, and that they will get the director general to publish specific information about lead pipes and coal-tar, pitch-lined pipes.

The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry): New clause 8 seeks to place an unfair burden of responsibility on the water supplier. Whereas now the water supplier is, quite rightly, responsible for the wholesomeness of water in water supply pipes, the new clause would make the water supplier additionally responsible for water in customers'


pipes unless the water supplier was able to prove that the customer had damaged the pipes or caused a leak which had led to contamination of the water. It would clearly be unreasonable to make the supplier responsible for the condition of a large number of other people's water pipes.
Safeguards for water wholesomeness are already stringent. Ninety-nine per cent. of the 3·3 million tests carried out in 1990 by the drinking water inspectorate were satisfactory. Indeed, privatisation has enabled the water industry to set in place a programme for remedial action for those supplies which do not yet comply with standards. This will involve a capital investment programme of over £2 billion by 1995. So new clause 8 would not acid any significant protection to the consumer but would place an unfair burden on the water supplier.
New clause 9 is redundant. It seems to be trying to make sewer undertakers liable for repairs to public sewers, but they are already so liable.
With regard to further information, clause 24 already makes provision for the director general to collect information from water undertakers about their performance against standards set out in section 38 of the Water Industry Act 1991. In this context, quality of drinking water is obviously of paramount importance. As I made clear in Committee, this is not a matter for the Director General of Water Services; it is a matter for the drinking water inspectorate, which enforces the standards. knowledge of the whereabouts of pipes is needed at times, but that information is already available. Section 198 of the Water Industry Act requires undertakers to keep records of all pipes and underground works vested in the undertakers and to make those records available, free of charge, for inspection by the public.

Mr. Win Griffiths: I hear what the Minister is saying and I only wish that it were correct—unless, of course, Dwr Cymru has got its own legal position absolutely wrong. I shall be referring to this information in more detail later, but I will read one sentence of the reply I received to my request for information about lead pipes.
The chairman of Welsh Water, John Jones, said this:
Unfortunately, I am unable to provide details of areas specifically affected by lead piping since Dwr Cymru has no right to obtain this information. However, I believe that it can safely be assumed that all areas will have some properties with lead pipework.
He could not give me specific information.

Mr. Baldry: As I made clear—and of course this is correct because it is on the face of an Act of Parliament—section 198 of the Water Industry Act requires undertakers to keep records of all pipes and underground works vested in those undertakers and to make those records available, free of charge, for inspection by the public. In short, if the director general has need of such information, he too has access to it. This amendment is unnecessary.
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The purpose of amendment No. 4 is to require the director to collect and publish information about drinking water quality. Again, this amendment shows a misunderstanding of the nature of the tough regulatory regime that we have already put in place arid of the various regulators.
Drinking water quality standards are not a matter for the Director General of Water Services. The standards for drinking water quality are set out by my right hon. Friend

the Secretary of State in the water quality regulations which are enforced by the drinking water inspectorate. The inspectorate already regularly obtains information from the water companies about the quality of water supplied under no fewer than 57 parameters and the inspectorate publishes an annual report giving a comprehensive description of drinking water quality in England and Wales tested rigorously against the very demanding criteria of the water quality regulations.
Therefore, this amendment is not only not appropriate but would simply lead to a duplication of effort, requiring the director general to collect and publish such information—an exercise already ably and competently undertaken by the drinking water inspectorate.
The new clauses and amendments are redundant, otiose or unnecessary.

Question put and negatived.

New Clause 11

RESTRICTIONS ON DIVERSIFICATION

`The following section shall he inserted in the Water Industry Act 1991, after section 14—
14A. The Director General of Water Services may require the appointed company not to engage in specified diversification of its activities if he is of the opinion that the company's ability to meet its statutory obligations would be prejudiced by such diversilication.".'.—[Mr. Alex Cathie.]

Brought up, and read the First time.

Mr. Alex Carlile: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this we will take new clause 53—Water and sewerage undertakers: subsidiary companies—
`.—(1) It shall be a condition of appointment that any water and sewerage undertaker shall separate completely its statutory functions from those of any subsidiary company which carries out activities unrelated to its statutory role.
(2) The Director shall establish such rules as are necessary to ensure that customers of any water and sewerage undertaker pay no charges or make any contribution to the undertaker for the activities of any of its subsidiaries.'.

Mr. Carlile: The Liberal Democrats recently published a drinking water survey called "Coming Clean on the Water We Drink". It produced some interesting results—rather more interesting than the title, perhaps, for which I am pleased to claim no credit. Our survey found that about 416.000 people in the South West Water area were supplied with water which breached regulations owing to its aluminium content. We know how much concern there has been, in the south-west in particular, about aluminium in water. Another 208,333 people were supplied with water which had come from 10 zones where regulations governing lead were being breached.
It is certainly fair to say that South West Water has undertaken a large investment programme, and it is to he commended, but that programme has failed to make up for years of decay and under-investment in the infrastructure. As a result, a large number of people are still drinking sub-standard water.
It is my view that it is reasonable that, faced with the enormity of this problem, water companies which do not possess sufficient resources to meet their commitments as water suppliers should not, without close regulation, be


allowed to diversify their activities, particularly into speculative ventures. The new clause offers a straightforward and necessary additional measure of regulation.
The Water Industry Act 1991 sets up a different corporate structure for the privatised water plcs from that for other utility plcs. The holding company may own other companies, one of which is called the "appointed" company under the Act. That company receives the appointments under the relevant licence. The appointed company deals with the core business, which is water and sewerage works. That core business is regulated, but the holding company may, perfectly reasonably, also own subsidiaries that are totally unrelated to the core business.
That means that Ofwat has no jurisdiction over those associated activities, except to ensure that any diversification does not harm the appointed company's ability to meet its commitments. That in turn means that, although the director general can look at the potential effect of an associated company, relating to the appointed company's ability to meet its commitments, he cannot look at what is happening in associated companies once they have been established by the appointed company.
Last September, Ofwat issued a licence amendment specifically dealing with that issue. The director general, Mr. Byatt, who has exercised great skill in his role—I deprecate the earlier criticism of him—quickly recognised the effects that diversification was having both on the public image of water plcs and on the companies' resources. The decision by Welsh Water, Dwr Cymru, to set up a series of hotels stamped clearly on the public mind the fact that water plcs are engaging in business that is very diverse from water. Wales has some fine hotels, but many of its country hotels are available to any purchaser who can offer a reasonable price because he will not make much money out of them. It may be argued that Dwr Cymru's investment is sound in the long term, but it does not appear to be a sound investment at present.
The licence means that the plcs must certify that they have the necessary financial and managerial resources to meet the appointed companies' obligation under the statute. Ofwat is carrying out a ring-fencing exercise to assess the sufficiency of the resources that are going in to meeting the appointments. However, Ofwat recognises that the issuing of a licence is only a monitoring device and that the regulator cannot forbid diversification, even if it is found that the company does not have sufficient resources to undertake its statutory duties because the resources are being frittered away elsewhere. That is what the new clause is all about.
Who pays for the losses that may occur as a result of diversification? Many companies have gone out of business, and big business is not exempt from that trend. Clearly, it would be wrong for the water companies' customers—those of us who turn on the tap and provide the sewage—to pay for the provision of services that are unrelated to the water companies' main purpose, if those services lose money. Mr. Byatt is on record as saying plainly that the losses made by subsidiaries should be borne by the shareholders of the plcs, not by the customers. Otherwise, a dreadful injustice could result whereby not only would the companies fail to meet their obligations to the detriment of consumers, but they would

be forced to stand the losses made by the activities that had diverted the resources away from keeping up the appointments for statutory duties.
To show that I am not exaggerating, I shall focus on some examples of diversification activities, other than the hotels that I have mentioned. There are good and bad examples. Some of the diversifications that have been carried out by North West Water should be considered against the background of the capital expenditure programme to which the companies are committed and the costs of meeting various European Community drinking water, bathing and waste treatment standards—for example, the municipal waste water directive.
Earlier this year, I went bathing in Bournemouth at 3 o'clock in the morning and a very pleasant experience it was, too. Bournemouth's is one of the few beaches in this country that meets the European criteria. You, Madam Deputy Speaker, are welcome to join me next time I go swimming at 3 o'clock in the morning.
The impact of meeting all those obligations already has an inevitable cost consequence for the consumer. Indeed. the Secretary of State for the Environment recently said that water charges may need to increase by 50 per cent. by the end of the century to meet statutory and European Community obligations. So it is important that diversification should not bleed money from the plcs to raise charges even more. Naturally, some diversification is relevant and makes good sense.
North West Water has diversified into activities related to the water business, such as water purification and treatment, which is an acceptable form of diversification. It is important, however, that it be monitored closely because of possible competition implications.
An example of competition implications can be taken, again, from North-West Water. It has acquired several businesses from abroad and at home that specialise in the designing and engineering of water and waste systems. In particular, it has acquired a good company called Water Engineering Ltd., primarily engaged in the design and installation of water and waste treatment plants in the United Kingdom. That key company is involved as a supplier in the £24 billion capital expenditure programme to be undertaken in the next 10 years. A consequence of that ostensibly sensible investment is that North West Water will be involved in buying services from a company that it owns wholly.
That raises the issue of transfer pricing and the dangers of cross-subsidisation between the core business of North West Water and Water Engineering Ltd. It is important that the cross-subsidisation should not be at the expense of the consumer of water services. North West Water has given assurances that it would buy services from its subsidiary at full market rates, and I welcome that assurance. Nevertheless, there is plainly concern about the possible vertical integration of the water industry by such deals.
Ofwat is carrying out a survey of transactions between core businesses of the water plcs and subsidiaries in related markets, and investigating transfer pricing. If Ofwat finds that the survey shows that the public interest is not being served, it is important that it should have powers to deal with such a problem.
7.30 pm
Much less defensible, however, is diversification into completely unrelated areas, especially when the companies involved—the plcs—have very high environmental targets which in many cases they are not meeting. There is plenty of evidence that those targets are not being met. High targets also mean that companies are likely to have higher K factors—as they are called—relating to price increases. That is the case with South West Water, which recently chose not to defer its full K increase for 1992. Its average bill for next year is £91·23, an increase of well over 10 per cent. on 1991.
One appreciates that South West Water has a very high capital programme, which includes investment to end the dispoal of sludge at sea by 1998. However, South West Water, with all those obligations and in addition to possessing six subsidiaries in businesses which relate to water and waste treatment, has a 20 per cent. stake in West Country Television Ltd. That media acquisition might be a good investment, but it is plain that such an investment has no relation whatever to the core business.
The new clause raises an issue of principle: is the regulator to have a full range of powers to deal with the panoply of business conducted by the water plcs in order to ensure that that full panoply is being operated in the interests of the consumer, or is he to have only powers which are restricted to the appointed company, to the company providing the water services? If he has the full range of powers, the public interest is fully protected. If he has only limited powers, it follows logically that there is only limited protection. The new clause seeks to ensure maximum public protection without in any way preventing the privatised companies from conducting their businesses sensibly and with reasonable regard to normal business practice.

Mr. Win Griffiths: We fully endorse all that the hon. and learned Member for Montgomery (Mr. Carlile) said about the need to control the diversification activities of the water companies. Our new clause seeks to do more or less the same as his. We want to ensure that, before any water or sewerage undertaker is appointed to carry out its statutory role, any subsidiary company that it establishes whose activities are wholly unrelated to that statutory role is completely separate from the core business and that the director establishes such rules as are necessary to ensure that, whatever happens to the unrelated subsidiary business, the customers of the water and sewerage undertaker do not contribute in any way.
There is no doubt that the current appointees in England and Wales—the water and sewerage companies—have taken advantage of the immensely beneficial position in which they found themselves as monopoly suppliers of water and sewerage services to buy into businesses which cannot be regarded as related to their core business. Northumbria Water, for example, has bought into cable television; Yorkshire Water is involved in the direct mail business; Thames Water is involved in landscape gardening and Southern Water in vehicle leasing.
I must not neglect to mention Welsh Water, Dŵr Cymru. I usually mention it as its chairman is a constituent of mine and I try to look after his best interests, however he might test my desire to do so. Welsh Water has engaged in some wonderful diversifications which currently include—I believe—a 14·9 per cent. share in South Wales

Electricity, which cost, if I remember rightly, more than £300 million. Surely, that money which it claims was raised on the capital markets, could have been much better used to speed up the programme to comply with water quality standards required under European Community directives.
The hon. and learned Member for Montgomery raised a number of serious issues relating to the activities of water and sewerage undertakers in subsidiary businesses which are not related to their core activities. I shall deal with one or two issues which were not fully covered in his speech.
The first relates to the way in which the subsidiary business may receive loans from the core company to develop its activities. I am advised by consultants interested in the water industry that at the moment the accounts of the water companies cannot be sifted to detect whether the subsidiaries are paying the full commercial rate of interest on any loans that they may receive from the core business. That is one reason why we believe that the two activities should be completely separate. The way in which the money may move between the two and the way in which the charges are made for services provided between them should be immediately evident to anyone who studies the accounts of the core business or of the subsidiaries.
Another issue is that of taxation. The water companies were given a highly preferential deal on corporation tax when they were created. I think that it is true to say that, for well over 20 years, they will not have to pay corporation tax. Under the complex group taxation rules, if a core business somehow made a loss in a particular year—I agree that that would be incredible under the present rules—but the subsidiary companies made a profit, that profit would not be subject to corporation tax because it could be subsumed into the accounts of the core business, and corporation tax relief would be given. That would mean a loss of finance for the Exchequer arising in the first place from an extremely beneficial deal given to the water companies when they were created.
It is of course also possible for the core business to subsidise its subsidiary companies. Thames Water has acquired a business that is not directly related to its core services but which is a water industry service that Thames might use itself—it is a subsidiary plumbing company. It would be perfectly possible for Thames to allow that company to provide it with services at a favourable rate. Thames could put business its way, to the disadvantage of other private competitors. I am sure that the Government would be concerned by such a development.
There are all sorts of ways in which core businesses and their subsidiaries might cross-subsidise each other. However, the customers of the core business could be disadvantaged and pay higher water charges because of the way in which the subsidiaries of that business operate.
We lost the vote in Committee on the principle of not allowing core businesses to run subsidiaries in unrelated areas of business, so at the very least the Government should accept these new clauses now, since they contain the sort of rules which will mean that customers paying for core business activities will not suffer from the multifarious and complex operations that are possible under our company and taxation rules. The waters, dare I say it, should not be muddied and no advantage should be taken of customers of a core business.

Mr. Baldry: The two new clauses have a similar purpose—to allow the director general to include conditions in a water or sewerage companies appointment prohibiting it from diversifying. I hope that the House will not think me discourteous if I therefore discuss them both together.
There was some suggestion that the water companies might be in some difficulty in meeting their statutory and other obligations. It is fair to point out that, last year alone, capital spending by the water companies increased by nearly 40 per cent. in real terms, to £2·5 billion. In the current financial year capital spending is planned to show a further increase of more than 20 per cent. in real terms, to more than £3 billion. There is every reason to expect that that will be achieved. As all hon. Members know, the water companies together are expected to spend about £28 billion over the next decade, which works out at investing £5,000 each and every minute on enhancing water quality.
It is clear that we get good value from our water charges. They are among the lowest in Europe, averaging only 43p per household per day for the combined costs of water supply and sewerage—roughly the cost of a single cup of coffee in any cafe in the country. The French, Germans and Italians all pay much more for their water services.
As for diversification, I appreciate the concern that lies behind the new clauses, but I feel that they are unnecessary. Of course it is important that the director general should have the power to ensure that an appointed undertaker's ability to carry out its core business is safeguarded. The legislation already provides for that. The director already has power to impose conditions restricting diversification by water and sewerage undertakers. Section 11 of the Water Industry Act 1991 gives the director wide powers to impose such conditions of appointment as appear to him necessary or expedient. Section 2 of the Act imposes a general duty on the director to exercise his regulatory functions in a manner best calculated to ensure the proper provision of water and sewerage services throughout England and Wales, and to ensure that the undertakers can finance the proper carrying out of their functions.
The director general has already taken steps to ensure that water and sewerage services are not put at risk by diversification. He has agreed to an amended condition F of the instrument of appointment of water and sewerage undertakers, which came into effect on 3 September last year. It requires the appointed undertakers to act at all times in a manner best calculated to ensure that they have adequate financial and management resources to enable them to carry out the regulated activities, including their investment programmes, to submit to the director with their accounting statements a certificate confirming that they will have adequate financial and management resources to carry out the regulated activities for at least the next 12 months, and to submit a further certificate when an appointee or any group company embarks on any activity other than a regulated activity which could be material to the appointee's ability to finance the carrying out of the regulated functions.
7.45 pm
So, condition F already requires the finances of the core business carrying out the regulated activity to be ring-fenced and reported on separately from any other activity. The director keeps the licence conditions under

review and I have no doubt that he will take action if there is evidence that the new conditions are not providing adequate protection for the customers.
In my submission these new clauses would not add any protection to consumers or customers, and there is no evidence to suggest that businesses are failing to discharge their responsibilities in every regard.

Mr. Alex Carlile: I am disappointed by the Minister's response, because the purpose of the new clauses is to ensure that, if the director general sees, in his regulatory role, that he ought to be able to take certain actions to correct what is happening, he should be able to take them. Such powers do not exist now, or at least they are not strong enough.
We shall obviously watch what happens to the subsidiaries of the water plcs with great care, and no doubt there will be more opportunities to return to this subject. I am therefore content not to press the matter, and I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Mr. Win Griffiths: Madam Deputy Speaker, I wanted to ask the Minister a couple of questions—

Madam Deputy Speaker: Order. The hon. and learned Member for Montgomery (Mr. Carlile), who moved the new clause, has withdrawn it.

New Clause 20

EXERCISING OF ANY TELECOMMUNICATIONS DISPUTE RESOLUTION FUNCTION

'The Tribunals and Inquiries Act 1971 shall be amended as follows—

(1) In section 10, after "Foreign Compensation Commission" there shall be inserted "or the Director General of Telecommunications";

(2) In section 13(1), after "28(b)" there shall be inserted "30B";

(3) In Schedule 1, after paragraph 30A there shall be inserted—
30B The Director General of Telecommunications and any prescribed person, arbitrator or arbiter, in respect of the exercise of any dispute resolution function under the Telecommunications Act 1984 (c. 12), and any member of the Director's staff authorised to exercise those functions under paragraph 8 of Schedule 1 to the Telecommunications Act 1984.".'.—a[Mr. Hain.]

Brought up, and read the First time.

Mr. Hain: I beg to move, That the clause be read a Second time.
I do not make these remarks in an adversarial spirit, and I may even spare the Minister the sort of peroration for which he chided me in an earlier debate—most unfairly, I thought.
That is not to say that the new clause does not represent a serious issue; it is an extremely serious issue, as I shall suggest later. However, in Committee the Minister showed a fair degree of sympathy with the thinking behind the newclause, saying:
I shall certainly reflect further … and … give more information on Report".—[Official Report, Standing Committee E, 17 December 1991; c. 383.]
I trust that we will not be disappointed this evening, given that expression of intent.
The new clause deals with a serious anomaly in the Bill, which is that the regulator has a quasi-judicial power, yet no clear legal obligation to give reasons for his decisions on disputes such as those over billing, charging, bad debt,


deposits and so on. That leaves the public in the dark and it leaves British Telecom—or, for that matter, any other designated operator—in the dark over policy standards. If there is a dispute between a customer and British Telecom, surely BT should be fully aware of the reasons for the regulator's decision on the dispute, so that it can then change its policy, alter its standards and ensure that the mistake is not repeated. Similarly, the customer should be aware of the reasons for the regulator's decision.
If the tribunals legislation is applied in the way that the clause suggests, section 12 of the Act would require the director general to give reasons for his decision. The new clause would accomplish that task and remove a serious anomaly. It would also allow a right of appeal to the courts which is presently denied to any complainant who feels that he has been unfairly treated by the regulator or by a designated telecommunications operator such as BT.
The application of the Tribunals and Inquiries Act 1971 to the Director General of Telecommunications would allow an appeal on a point of law in the High Court against the director general's decision. Under the Bill, the director general's decision is or could be final and would preclude an appeal on a point of law, although the question of a judicial review may remain open. The Minister has said:
Let me first reassure him that the director generals will give reasons. Were they not to do that, the decisions could be subject to judicial review.
He also said:
I think that regulators should give reasons, and will have to do so under the Bill. If they do not, they will have the sanction of judicial review."—[Official Report, Standing Committee E,17 December 1991; c. 382–83.]
Far be it from me as a humble Back Bencher to disagree with the no doubt eminent advice of the vast ranks of the Minister's civil servants, which no doubt include learned civil servants. However, I have taken legal advice, and I am told that the Minister's statement is wrong in law on two counts. First, there is nothing in the Bill to oblige the director general or the arbitrator to give reasons for his decision. Accordingly, the Minister must be relying on a purported statement of general law.
Secondly, there is no general rule of administrative law obliging regulators and other administrative officials carrying out judicial—type functions to give reasons for their decisions. If there were such a general rule, it is accepted that failure to give reasons would be a ground for judicial review. I am also advised that the Minister is wrong to say that failure to give reasons would attract the sanction of judicial review.
Statutory tribunals listed in the Tribunals and Inquiries Act are required to give reasons, unless they are covered by one of the exceptions in the Act. There are cases which suggest that a court could hold that a statutory tribunal not listed in the Act must give reasons for its decisions. However, there is no general rule of law that tribunals, or administrative authorities which are not called tribunals but carry out judicial—type functions, such as the Director General of Telecommunications, must give reasons for their decisions.
It is important for the Minister to define a tribunal in this context, because it is not defined in general law. When he is resolving a dispute in this manner is the Director General of Telecommunications acting as a tribunal on, for example, a request for a deposit? That issue can be satisfactorily settled only by including a specific provision

in the Bill that the director general is a tribunal in this context and has a specific obligation to give reasons for his decisions.
The essential point is that, although it is possible for a court to be persuaded to hold that a director general was acting as a tribunal and may also be persuaded to hold that he was a formal tribunal of the kind that the law recognised as obliged to give proper reasons for its decisions, there is no certainty that a court would so hold. It is wrong for there to be uncertainty about the director general's duty in this respect. It should not be left to British Telecom or a customer or a complainant against BT who is dissatisfied with the director general's decisions, but has received no reasons for them, to have to test the law by seeking a judicial review to find out whether the director general is obliged to give reasons for his decisions.
The issue should not be left to that complicated internecine process but should be made specific in the legislation and should not rest on the say-so of a Minister in Committee or in the House. It is almost an insult to the intelligence of consumers, if not to the House, to say that somebody who is not satisfied with the director general's decision should have to rely on a judicial review. The whole process of such a review is extremely complex and consists of a number of stages. To stop frivolous applications one has first to apply for permission to apply. It is time-consuming and costly and, as far as I am aware, there is no entitlement to legal aid for those seeking leave to appeal to a judicial review.
It is not a realistic option for a consumer who is not satisfied with the director general's decision. A dissatisfied consumer or a company such as BT should not have to resort to judicial review. It is nonsense. The legislation should stipulate that the director general should give reasons for his decisions in resolving disputes. The Minister must concede that this is a basic matter of a consumer rights.

Mr. Redwood: As the hon. Member for Neath (Mr. Hain) says, I undertook in Committee to provide more information if the Council on Tribunals came to a stronger view on dispute resolution by the regulators. The council has done so because it has concluded that it should seek supervision over adjudication functions of the regulators. The implications of that are that the council would wish to oversee the setting up and operation of procedures which might involve oral hearings of a tribunal type. The council is not looking at the complaints procedures of any of the utilities, as the Opposition previously implied. Under the tribunals legislation, it would not provide relief in a particular case. It is concerned with procedures.
In the light of the council's view, the Government are now considering how best to proceed. Departments are considering their position with their regulators, because each one raises somewhat different issues. They will liaise with the council and decide on each of the regulators. I shall look at telecommunications with an open mind and in the light of what the hon. Gentleman has said.
If Departments reach agreement with the council which necessitates formal supervision to be stated, that will be done by the Lord Chancellor's Department as an order under the Tribunals and Inquiries Act 1971. I hope that the hon. Gentleman will accept the promise that we are reviewing the matter in the light of the council's statement. He might agree that the route that we suggest is a better legal route than an amendment. I cannot say that our legal


advice is the same. The views that I expressed in Committee obviously depended on legal advice to the Government, and our view is still that these matters could be subject to judicial review in the way that I then described.

Mr. Hain: I thank the Minister for his sympathetic response. However, I think that the advice that I have been given is stronger than the Minister's response and I do not wish to withdraw the clause.

Question put and negatived.

New Clause 21

COMPETITIVE PIPELINE CONSTRUCTION

`After subsection (2) of Section 20 of the Gas Act 1986 there shall be inserted—
(2A) The Director shall not allow such shorter period if in his opinion—

(1) The construction of this pipeline constitutes an anti-competitive practice or an abuse of a dominant position in the market.

(2) The public gas supplier has prior to giving notice under subsection (1) above made application to a local planning authority for planning permission for that pipeline and that application will inhibit potential competitors of this supplier from executing any works for the construction of a pipeline to serve a similar market.

(3) The intention of the public gas supplier in giving notice under subsection (I) above is to inhibit potential competitors of the supplier from executing any works for the construction of a pipeline to serve a similar market.

(4) The investment in the pipeline is inconsistent with the public gas supplier's duty under section 9(1)(a) above.".'.—[Mr. Tim Smith.]

Brought up, and read the First time.

8 pm

Mr. Tim Smith: The term "level playing field" is much used, but it best describes what my new clause seeks to achieve. Until quite recently, British Gas was the monopoly constructor of pipelines. There are now other companies that wish to compete with British Gas in constructing pipelines and they are finding planning and other difficulties in their way. The object of the new clause is to give additional powers to the Director General of Gas Supply so that he can deal with the problem.
I do not want to delay the House by going into great detail. This is a technical matter, but the principle is simple enough. I am glad to say that the principle has the support of the Director General of Gas Supply, who I was glad to see was knighted in the new year's honours. I believe that he does an excellent job in combating the monopoly which is British Gas. He has written to my hon. Friend the Minister to say that he supports the principle behind the new clause.
Timing is important. The director general explains in his letter:
There has been no competitive pipeline construction in the gas supply area for many years. There are ten new power stations on the planning path at this time … as a consequence pipelines will be required to carry the gas to the sites.
That means that timing is critical. I believe that my hon. Friend the Minister may be waiting for agreement within

the European Community on two important directives that will impact upon these matters. My plea to him is that the matter is more urgent than that, for the reasons that I have given. I hope, therefore, that he will give serious consideration to the principle behind my proposal.

Mr. Morgan: We were rather worried that the hon. Member for Beaconsfield (Mr. Smith) would not move the new clause, and we are pleased that he did. It raises some interesting considerations about the way that the Government, with the support of the Director General of Gas Supply, see the evolution of a competitive gas market. As we said in Committee, a competitive gas market could take two different forms. There could be one set of pipelines with different suppliers pushing gas through them. There could be two sets of pipelines. There could be two sets of long-distance tranmission lines and only one local distribution network. As the Minister agreed in Committee, there is a possibility under the Government's proposals that there could be two sets of local distribution pipes as well as two sets of long distance transmission pipes from the gas fields or the beachheads in East Anglia, Morecambe bay, north Wales or wherever.
I shall explain why the Opposition cannot support the new clause, even though we think that it contains some interesting ideas. We think that the ability to break ground, as it were, for long distance transmission and transmission pipes requires much more consultation with local authorities, which will have to give planning permission. We entirely agree, however, that it should not be possible for British Gas to abuse its monopoly position. That may or may not be covered adequately by article 85—I think that that is the relevant article—of the treaty of Rome. I believe that that provision deals with dominant position. We are not completely happy that enough work has yet been done with the local authorities.
We do not know what the reaction of the general public will be to the idea of two or possibly more companies having the right to break streets. We said in Committee that it has occurred only once in the context of the British gas industry, and that was in Edinburgh before the first world war. We think that residents would not be comforted if two entirely separate gas networks were to evolve.
There are some possible health and safety implications that we have not yet sufficiently explored. Gas is an extremely combustible commodity. If a public-spirited citizen is taking his dog for a walk and he smells gas, or thinks he does—it is often a badly cleaned sewer, and in both instances there is methane—and decides to telephone the gas supplier, he will look for "G" in the telephone book and make a call. To be fair, there is usually a response within 20 minutes and something is done. If there are two or three sets of gas suppliers or networkers, can we be sure how we would organise emergency services?

Mr. Tim Smith: I might he able to reassure the hon. Gentleman. As far as I am aware, the companies that are interested in competing in British Gas are not interested in competing to supply gas to domestic consumers by digging up the streets and having two or three lines running underneath the pavement. They are more interested in supplying the industrial market over long distances.

Mr. Morgan: Unfortunately, the implications of opening two ownerships of long-distance transmission gas pipelines and of owning, local distribution networks is that


two gas companies will run lines down the middle of the street and compete for supply. That which happened in Edinburgh before the first world war was not excluded by the Minister in Committee, and I assume that he will not exclude it when he replies on behalf of the Government, unless he has had a change of heart. Therefore, there is the possibility of two separate street-breaking rights for local distribution gas suppliers. That is possible given the way that the Government envisage the long-term development of transmission. If the Minister wants to say that that is completely off, that it is out of court and that he has changed his mind since Committee, fair enough. If that is the position, we shall listen. We need to know, however, exactly how the health and safety requirements would be implemented, bearing in mind that gas is such a highly combustible and explosive commodity.
We do not think that the hon. Member for Beaconsfield has considered sufficiently how the emergency services would work if there were actual or suspected gas leaks or distribution leaks. The public respond extremely well if there is a whiff of gas, and we must ensure that they would be able to respond in the same way if there were two or more suppliers. We do not know what the reaction of local authorities and the general public would be if two or three additional gas suppliers had the right to break streets to provide a supply or repair a supply. Local authorities would have to be consulted before we could be sure of their reaction. We cannot give our support to the new clause at present.

Mr. Redwood: The Government are sympathetic to the concerns that have been raised by my hon. Friend the Member for Beaconsfield (Mr. Smith) about inequalities in the laying of gas pipelines. We remain firmly committed to the introduction of the level playing field that he is seeking. We need to take account of existing European Community legislation on the environment and the revised Seveso directive, when it is adopted.
My hon. Friend's new clause contains provisions on anti-competitive or predatory behaviour. That can already be tackled by the Director General of Fair Trading under existing competition legislation. Anyone with evidence of such behaviour should make a complaint to the DGFT. I encourage those who think that such practices may be taking place to do just that. I am not convinced that the Director General of Gas Supply requires new powers in this area in addition to the powers that already lie with the Director General of Fair Trading.
In the longer term, the best way forward is to ensure that a fully competitive market exists in the supply of gas. This objective is being actively pursued. I do not find myself in agreement with the defence of monopoly that comes from the Opposition Benches. The Bill introduces new powers to end the monopoly of British Gas, and it is welcome for that. We recognise that the new clause takes up a genuine concern. The Government are therefore considering what legislative changes—especially planning changes—may be needed to create a level playing field to ensure that competition develops in the construction of gas pipelines. I cannot accept my hon. Friend's new clause. I do not think that it is in the right form, and I think that he might agree with me.

Mr. Tim Smith: I am grateful to my hon. Friend for what he has said. I understand that he recognises the difficulty and that he is prepared to consider it further. In the light of that, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 1

STANDARDS OF PERFORMANCE

Amendment proposed: No. 1, in page 3, line 14, after 'performance', insert
'including household penetration services for the disabled, and the balance of regional infrastructure development.'.—[Mr. Morgan.]

Question put, That the amendment be made:—

The House divided: Ayes 45, Noes 145.

Division No. 40]
[8.09 pm


AYES


Alton, David
Johnston, Sir Russell


Banks, Tony (Newham NW)
Kennedy, Charles


Barnes, Harry (Derbyshire NE)
Lewis, Terry


Brown, Nicholas (Newcastle E)
Livsey, Richard


Brown, Ron (Edinburgh Leith)
McAvoy, Thomas


Campbell, Menzies (Fife NE)
Meale, Alan


Campbell, Ron (Blyth Valley)
Michie, Bill (Sheffield Heeley)


Carlile, Alex (Mont'g)
Morgan, Rhodri


Carr, Michael
Nellist, Dave


Cook, Frank (Stockton N)
Powell, Ray (Ogmore)


Cox, Tom
Reid, Dr John


Cryer, Bob
Skinner, Dennis


Davis, Terry (B'ham Hodge H'l)
Spearing, Nigel


Dixon, Don
Stephen, Nicol


Dunwoody, Hon Mrs Gwyneth
Thompson, Jack (Wansbeck)


Ewing, Mrs Margaret (Moray)
Vaz, Keith


Fisher, Mark
Wallace, James


Foster, Derek
Watson, Mike (Glasgow, C)


George, Bruce
Williams, Rt Hon Alan


Gordon, Mildred
Wise, Mrs Audrey


Griffiths, Nigel (Edinburgh S)



Griffiths, Win (Bridgend)
Tellers for the Ayes:


Hain, Peter
Mr. Frank Haynes and


Henderson, Doug
Mr. Robert N. Wareing.


Hughes, Simon (Southwark)



NOES


Baldry, Tony
Dover, Den


Bellingham, Henry
Dunn, Bob


Bevan, David Gilroy
Durant, Sir Anthony


Blaker, Rt Hon Sir Peter
Dykes, Hugh


Bottomley, Peter
Eggar, Tim


Bowis, John
Evans, David (Welwyn Hatf'd)


Brandon-Bravo, Martin
Fallon, Michael


Brown, Michael (Brigg &amp; Cl't's)
Farr, Sir John


Browne, John (Winchester)
Fenner, Dame Peggy


Bruce, Ian (Dorset South)
Fishburn, John Dudley


Burns, Simon
Forth, Eric


Burt, Alistair
Freeman, Roger


Butterfill, John
French, Douglas


Carlisle, John, (Luton N)
Gale, Roger


Carttiss, Michael
Goodlad, Rt Hon Alastair


Channon, Rt Hon Paul
Greenway, John (Ryedale)


Chapman, Sydney
Gregory, Conal


Chope, Christopher
Griffiths, Peter (Portsmouth N)


Clark, Rt Hon Alan (Plymouth)
Grist, Ian


Clark, Dr Michael (Rochford)
Ground, Patrick


Clark, Rt Hon Sir William
Hague, William


Clarke, Rt Hon K. (Rushcliffe)
Hamilton, Neil (Tatton)


Conway, Derek
Hargreaves, Ken (Hyndburn)


Coombs, Anthony (Wyre F'rest)
Harris, David


Coombs, Simon (Swindon)
Hawkins, Christopher


Cope, Rt Hon Sir John
Hayes, Jerry


Cormack, Patrick
Hayhoe, Rt Hon Sir Barney


Couchman, James
Heathcoat-Amory, David


Cran, James
Higgins, Rt Hon Terence L.


Davies, Q. (Stamf'd &amp; Spald'g)
Hordern, Sir Peter


Davis, David (Boothferry)
Hughes, Robert G. (Harrow W)






Hunt, Sir John (Ravensbourne)
Paice, James


Hunter, Andrew
Patnick, Irvine


Irvine, Michael
Pattie, Rt Hon Sir Geoffrey


Jackson, Robert
Porter, Barry (Wirral S)


Janman, Tim
Porter, David (Waveney)


Johnson Smith, Sir Geoffrey
Powell, William (Corby)


Kellett-Bowman, Dame Elaine
Raison, Rt Hon Sir Timothy


Kilfedder, James
Rathbone, Tim


King, Roger (B'ham N'thfield)
Redwood, John


Kirkhope, Timothy
Rowe, Andrew


Knapman, Roger
Shaw, David (Dover)


Knight, Greg (Derby North)
Shaw, Sir Michael (Scarb')


Knight, Dame Jill (Edgbaston)
Shepherd, Colin (Hereford)


Lawrence, Ivan
Sims, Roger


Lee, John (Pendle)
Skeet, Sir Trevor


Lightbown, David
Smith, Tim (Beaconsfield)


Lloyd, Peter (Fareham)
Speller, Tony


Lord, Michael
Spicer, Sir Jim (Dorset W)


Luce, Rt Hon Sir Richard
Stanley, Rt Hon Sir John


MacGregor, Rt Hon John
Stern, Michael


MacKay, Andrew (E Berkshire)
Stevens, Lewis


McLoughlin, Patrick
Stewart, Andy (Sherwood)


McNair-Wilson, Sir Michael
Sumberg, David


McNair-Wilson, Sir Patrick
Taylor, Ian (Esher)


Malins, Humfrey
Taylor, John M (Solihull)


Mans, Keith
Taylor, Sir Teddy


Marlow, Tony
Thompson, Patrick (Norwich N)


Marshall, Sir Michael (Arundel)
Tredinnick, David


Martin, David (Portsmouth S)
Twinn, Dr Ian


Maxwell-Hyslop, Sir Robin
Waller, Gary


Miller, Sir Hal
Ward, John


Mills, Iain
Wardle, Charles (Bexhill)


Mitchell, Andrew (Gedling)
Warren, Kenneth


Moate, Roger
Watts, John


Molyneaux, Rt Hon James
Wheeler, Sir John


Moss, Malcolm
Widdecombe, Ann


Moynihan, Hon Colin
Winterton, Nicholas


Neubert, Sir Michael
Wood, Timothy


Nicholson, David (Taunton)
Young, Sir George (Acton)


Nicholson, Emma (Devon West)



Norris, Steve
Tellers for the Noes:


Onslow, Rt Hon Cranley
Mr. Tom Sackville and


Oppenheim, Phillip
Mr. Tim Boswell.


Page, Richard

Question accordingly negatived.

Clause 6

BILLING DISPUTES

Mr. Redwood: I beg to move amendment No. 12, in page 7, line 35, after 'sheriff', insert—

'( ) Except in such circumstances (if any) as may be prescribed by regulations under this section—
(a) the Director or an arbitrator (or in Scotland an arbiter) appointed by him shall not determine any billing dispute which is the subject of proceedings before, or with respect to which judgment has been given by, any court; and
(b)neither party to any billing dispute which has been referred to the Director for determination in accordance with regulations under this section shall commence proceedings before any court in respect of that dispute pending its determination in accordance with the regulations.

( ) No designated operator may commence proceedings before any court in respect of any charge in connection with the provision by him of any relevant service unless, not less than 28 days before doing so, the customer concerned was informed by him, in such form and manner as may be prescribed by regulations under this section, of—

(a) his intention to commence proceedings;
(b) the customer's rights by virtue of this section; and
(c) such other matters (if any) as may be so prescribed.'.

Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to take Government amendments Nos. 13, 14, 53 and 22.

Mr. Redwood: The amendments put it beyond doubt that resolution of a billing dispute by the director general should be available instead of, and not as well as, going to the county court. The amendments aim to prevent simultaneous actions going on in the two arenas, with the confusion that that would cause. In addition, the amendments would forestall the possibility that a utility might start debt proceedings in court against a customer who had disputed the bill and had referred that dispute to the director general. If the utility wants to take a customer to court it must give 28 days' notice and tell the customer of his right to go to the director general instead. Amendment No. 53 is clarificatory.

Mr. Morgan: May I ask for further clarification of exactly how the Minister envisages that the arrangement would work? I am concerned about how practical a measure it is in real life. I am worried that it would invite the public utilities in the first place to initiate debt proceedings, to issue the warning specified in the four clauses that we are offered as amendments affecting the regulatory set-up for the four utilities.
The utilities would say, along with the warning, "Instead of the debt proceedings continuing, you can have the matter referred to the director general—not as a complaint but for arbitration." Most people would then decide that they would have a better chance with the director general than with the county court because he sounds less threatening, and they would go to the director general, as provided under the new powers.
The Minister is trying to present this as a two-sided dispute, involving, as well as billing disputes in which the public utility is the injured party, or believes it is—because of late payment, non-payment, a bouncing cheque or whatever—billing disputes in which the aggrieved party is the customer. In common, I am sure, with other Members on both sides of the House, I get complaints about, for example, the withdrawal of the four meter readings per year. Such billing disputes always produce deep suspicions when bills are estimated only three times a year. Some electricity companies read meters even less often than that, and people tend to believe that whether the bills are overestimated or underestimated, the companies are cheating them. That may or may not be so, but it leads to suspicions.
In some billing disputes, the aggrieved party is the customer rather than the utility, and if this is to be an even-handed, 50:50, "citizens charter" style improvement in consumers' rights vis-a-vis monopoly utilities, the legislation should be drafted so that, if public utilities reduce the number of meter readings from four to three per year—or from eight to five over a two-year period, as some are now doing—the customer should be able to say. "I will initiate a form of protest or complaint against you."
The only way in which the measure before us can work is when companies say, "We wish to recover a debt from you, but, short of a county court procedure—threat, threat; nudge, nudge; wink, wink—if you like we shall not contest the bill but will refer it to the director general for arbitration." In the letter, that will seem an attractive proposition. They will say, "We could take you to the county court for debt, but one way out of this for you is


to refer the matter to the director general, or an arbitrator appointed by him, not for a complaint but for final arbitration.
The threat of the county court frightens the life out of most people, especially elderly people, and it would still be there. There would simply be one alternative: "If you do not want to go to the county court, you can have a final arbitration by the director general." How much of a satisfactory additional right would that be for the average customer, if it becomes an excuse for the 20 odd utilities in the regulated monopoly sectors to litter the country with threats of county court action? There will be nothing to stop them, and they will be able to provide the little let-out that people may wish to obtain a final resolution through the director general or his arbitrator. I am not sure whether that is fair for consumers.

Mr. Redwood: The form of the amendments is clear and clarifies the position so that the issue will be resolved either by the court or by the director general. It is important that there should be an either-or choice. The customer gets the advantage, as the hon. Gentleman said in his disquisition, of being warned, with 28 days' notice of the intention to open court proceedings, and he will have the opportunity to enjoy his rights under the Bill. I would have thought that the hon. Gentleman would have welcomed that. Surely the Labour party agrees that we do not want parallel actions going on, with the chance that each might come to a different decision, with the extra costs, delay and hazards that that would involve. There should be an either-or choice. The clauses must be balanced, and the amendments achieve just that. I commend them to the House.

Amendment agreed to.

Clause 17

BILLING DISPUTES

Amendment made: No. 13, in line 34, at end insert—

'( ) Except in such circumstances (if any) as may be prescribed—
(a) the Director or an arbitrator (or in Scotland an arbiter) appointed by him shall not determine any billing dispute which is the subject of proceedings before, or with respect to which judgment has been given by, any court; and
(b) neither party to any billing dispute which has been referred to the Director for determination in accordance with regulations under this section shall commence proceedings before any court in respect of that dispute pending its determination in accordance with the regulations.

( ) No public gas supplies may commence proceedings before any court in respect of any charge in connection with the provision by him of gas supply services unless, not less than 28 days before doing so, the customer concerned was informed by him, in such form and manner as may be prescribed, of—

(a) his intention to commence proceedings;
(b) the customer's rights by virtue of this section; and
(c) such other matters (if any) as may be so prescribed.'.—[Mr. Redwood.]

Clause 21

BILLING DISPUTES

Amendment made: No. 14, in Page 19, line 37, at end insert—

'( ) Except in such circumstances (if any) as may be prescribed—
(a) the Director or an arbitrator (or in Scotland an arbiter) appointed by him shall not determine any billing dispute which is the subject of proceedings before, or with respect to which judgment has been given by, any court; and
(b) neither party to any billing dispute which has been referred to the Director for determination in accordance with regulations under this section shall commence proceedings before any court in respect of that dispute pending its determination in accordance with the regulations.

( ) No public electricity supplier may commence proceedings before any court in respect of any charge in connection with the provision by him of electricity supply services unless, not less than 28 days before doing so, the tariff customer concerned was informed by him, in such form and manner as may he prescribed, of—

(a) his intention to commence proceedings;
(b) the customer's rights by virtue of this section; and
(c)such other matters (if any) as may be prescribed.'.—(Mr. Redwood.]

Clause 24

INFORMATION WITH RESPECT TO LEVELS OF PERFORMANCE

Mr. Win Griffiths: I beg to move amendment No. 6, in line 6, at end insert—

`(6) In arranging for the publication of an information under subsection (4) above, the Director shall have regard to the need to include, so far as practicable, any matter which relates to—

(a) the health or physical well-being of consumers of water supplied by the undertaker concerned; and
(b) (in consultation with the NRA) the well-being of the environment, flora or fauna, or any amenity.'.

Mr. Deputy Speaker: With this it will be convenient to take the following amendments: No. 7, in clause 25, line 16, at end insert—

'(2) Without prejudice to the generality of subsection (1) above, each water undertaker shall include on each annual bill issued to customers a statement of whether drinking water supplied by the undertaker to the customer concerned has on every day during the previous twelve months fulfilled quality standards presented by or on behalf of the European Community and in force on the day concerned.

(3) Where on any day to which subsection (2) above is applicable such quality standards as are therin referred to have not been fulfilled, the undertaker shall include in the statement made under that subsection details of—

(a) the dates on which the standards were not fulfilled;
(b) the substances and amounts of such substances in respect of which the standards were not fulfilled;
(c) the principal health effects of the substances referred to in paragraph (b) above;
(d) the reasons which in the view of the undertaker caused the failure to fulfil standards; and
(e) the steps which it proposes to take to improve drinking water quality in the area concerned'.

No. 8, in clause 27, line 40, after 'performance', insert `(including the quality of river and other inland waterways and beach water into which sewerage treatment plants discharge)'.

No. 9, in line 22 at beginning insert—
'(5) Subject to subsection (6) below, where on any day to which subsection (2) above is applicable such quality standards as are therein referred to have not been fulfilled, the undertaker shall include in the statement made under that subsection details of—

(a) the dates on which the standards were not fulfilled;


(b) the full details in respect of which the standards were not fulfilled;
(c) the possible health effects of the failure to meet these standards referred to in paragraph (b) above;
(d) the reasons which in the view of the undertaker caused the failure to fulfil standards; and
(e) the steps which it proposes to take to improve sewerage services in the area concerned'.

No. 10, in line 35 at end insert—
' "(6) In arranging for the publication of any information under subsection (4) above, the Director shall have regard to the need to include, so far as practicable, any matter which relates to—

(a) (in consultation with the NRA) the health or physical well-being of people, and especially children, served by the undertaker concerned and
(b) (in consultation with the NRA) the well-being of the environment, flora or fauna, or any amenity.".'.

No. 11, in clause 28 line 45 at end insert—

`( 1A) Without prejudice to the generality of subsection ( I) above each sewerage services undertaker shall include on each annual bill issued to customers a statement of whether these services supplied by the undertaker to the customer concerned has on each occasion tests have been carried out during the previous twelve months fulfilled quality standards prescribed by or on behalf of the European Community and in force on the day concerned.'.

Mr. Griffiths: The purpose of the amendments is to bring home to the public the issues relating to the quality of the tap water that they drink, the water at the bathing beaches on which they may seek to enjoy themselves and of the rivers and waterways of England and Wales.
We want two types of information to be available. We have touched on one element in earlier debates—that is, the publication of general information by the director general on the quality of tap water and the quality of bathing beach water, in as much as that relates to the way in which the water companies and sewerage undertakings provide a service to deal with sewage. That service must ensure a high quality standard in the waters around our shores.
First I shall deal with tap water quality and the European Community directive. I have already mentioned lead pollution, and I shall not go into much detail on it now. Almost a quarter of our water zones have pollution levels that exceed the 50 micrograms per litre permitted under the EC directive. We know that lead in water definitely damages our health, and a large part of the country is affected by that type of pollution. More than 2 million people are at risk.
There may also be problems concerning aluminium, which is sometimes naturally present in our water and is sometimes added by the the water companies to help make the water clear. Again, about 2 million people are affected. They drink water which sampling procedures show to be above the EC permitted level of 200 micrograms per litre. Just over 10 per cent. of water zones do not meet the level set in the European Community directive.
8.30 pm
We all know that not long ago the Medical Research Council studied 80 districts in England and Wales and found that the risk of Alzheimer's disease was one and a half times higher where the mean aluminium concentrate exceeded 110 micrograms per litre, than in areas where it was 10 micrograms per litre. That level of 110 microgrames is well below the permitted EC level. Yet there is strong evidence of a link between aluminium and

Alzheimer's disease. I am pleased that some water companies have stopped using aluminium to help keep the water clear.
Several other damaging chemicals and substances are present in water in the United Kingdom. Almost 2 million people drink water which has nitrate levels above those permitted by the EC. Almost a third of water zones in England and Wales exceed the permitted levels. Some 298 water sources exceed the maximum admitted concentrations of pesticides. That probably affects more than 1 million people. Friends of the Earth took Thames Water to the European Court over pesticide pollution. I am pleased to say that the court case has been withdrawn and Thames Water and the other water companies have agreed to install treatment plants to prevent pesticide concentrations in our water.
Another issue of serious concern is groundwater pollution. Some 30 per cent. of our water supply comes from aquifers, wells and the like. Yet 10 per cent. of the supply has concentrations of cancer-causing solvents higher than the limits recommended by the World Health Organisation. The National Environment Research Council has expressed fears about the contamination of our groundwater. Doctor Stephen Foster is head of the NERC British geological survey hydrogeology research group. He said in a press notice:
Groundwater is under threat from an ever increasing number of soluble chemicals from urban and industrial activities and modern agricultural practices … Groundwater pollution takes place stealthily, almost imperceptibly and the slow movement of water from the land surface to deep aquifers means that it will take many years after a persistent chemical has entered the ground before it affects the quality of groundwater supplies. By the time the danger is realised large amounts of pollutants arc already present…we can no longer take high quality groundwater for granted.
I am pleased to say that the NERC is looking into the problem, but we already know that it is a growing problem.
The EC allows 800 grams per litre of trihalomethanes to be present in the water. Yet Germany has adopted an even lower limit of only 20 grammes per litre. The United States has a permitted level similar to that of the EC, but proposals have been made to reduce it, because research there has indicated a highly significant relationship between chloroform and cancers, particularly of the bladder, colon and rectum. So moves are afoot to deal with that problem.
I have already referred to polycyclic aromatic hydrocarbons. In Britain 4 per cent. of our water zones have concentrations above the permitted maximum. We have other problems such as cryptosporidium, of which there have been serious outbreaks in Oxford, Swindon, Hull and Scotland. The ones in the Oxford and Swindon areas lasted for three weeks in 1989. People suffered severe vomiting and diarrhoea. It is an ever-present problem. Unfortunately, it has become more of a problem simply as a result of cost-cutting methods of filtering water. That is an issue of which consumers need to be aware.
It is amazing that the Government have allowed relaxations of the permitted amounts of pollutants which present health dangers in excessive amounts in our water. Unfortunately, the EC has agreed to the relaxations. Thames Water is protected from prosecution on cryptosporidium pollution. North West Water, Severn Trent Water, Northumbria Water, Yorkshire Water and Welsh Water are all permitted to exceed lead levels. In the


north-west, there is as yet no date set for ending the relaxations. South West Water is permitted to exceed trihalomethane levels. Many water companies are allowed relaxations on faecal bacteria. Many companies have relaxations for aluminium. There are relaxations on the nitrate and pesticide levels for Anglian Water and Severn Trent.
So here we have the Government conniving to allow pollutants in our water at levels above those which are publicly acknowledged to pose a danger to health. That is why we believe not only that it is the responsibility of the director general to publish information on tap water but that such information should appear on water consumers' bills.
Last year, Which? magazine did a survey of the water companies and asked some of its members to write around to the water companies for information about the quality of their water. It found that 21 of the 44 water company responses did not supply information on the maximum levels of substances allowed in water; 17 of them gave no data which allowed comparisons to be made; nine of them gave data based on only three months information or less; 10 of the respondents gave the information in different ways to different customers who made the inquiry.
So there is no doubt that a great deal still needs to be done, despite what the Secretary of State said yesterday when he lauded the quality of British water as the best in Europe. I would not want to question that assertion, but what I am very concerned about is that, while making the assertion, the Government nevertheless allow pollutants in our water which are a danger to public health.
Let us take Wales as an example for some of the pollutants that I have already mentioned. As regards lead, samples have been taken in the county of Gwent, in the Brecknock district of Powys, in the Dynevor district of Dyfed, in Cardiff, in the Rhymney Valley district of Mid-Glamorgan, and in a whole swathe of territory from the north of Carmarthen bay across to Wrexham, where the lead levels are in excess of the EC maximum.
Trihalomethanes are also present in parts of Wales, and aluminium above recommended levels is to be found across the whole of Wales. I said earlier that I would refer in a little more detail to information supplied to me by Welsh Water on lead levels in south-east Wales. My inquiry of them showed that, in the city of Cardiff, for example, in Cardiff, North-West, 20 per cent. of the random samples taken exceeded permitted levels; in the Llanishen area 10 per cent.; in the Caerau/Fairwater area 25 per cent.; Cardiff-Docklands 25 per cent.; Cardiff, East 20 per cent.; Cardiff-Llandaff/Whitchurch 10 per cent.; Cardiff-Canton/Riverside 20 per cent.; and outside Cardiff, in the large town of Barry, in the Romilly Park-Wenvoe-Colcot areas, 15 per cent. Yet Welsh Water could not tell me exactly which houses were affected. That is why I believe it to be right that the water companies provide this information at least once a year on bills to consumers.
Welsh Water boasted about the availability of information to the public on the quality of their water. They said in a press release issued a few months ago:
A register can be viewed during normal working hours at the company's offices at Aberaeron, Bangor, Brecon, Haverfordwest (Withybush), Hereford, Mold, Nelson, and Swansea (Kingsway).
The citizens of Cardiff, where, as already shown, there is a serious lead problem, do not have access. The nearest

office is an hour or more away on public transport, in Nelson. In Committee, I explained that my nearest office would be Swansea, a city that I might visit two or three times a year and then generally not in office hours.
So although, as the Minister will tell us, the information is available and different organisations publish it, it is not accessible to the customer. I should have thought that, under the impetus of the citizens charter, the Government would be keen to have this information available to consumers.
8.45 pm
Turning briefly to the water quality arising out of the provision of sewerage services, it is somewhat ironic that the Government have chosen to blow the trumpet of the effectiveness of privatisation in speeding up the improvement in the quality of these services by denigrating their own record in the priority that they gave these services in the 12 years that they were in power before privatisation; but that is the fact. Unfortunately, in all respects, privatisation has not pulled off the trick, because we find that, only at the end of last year, when the National Rivers Authority's report on river quality appeared, the quality of our river water over the preceding five years had gone down; 15 per cent. of the rivers and inland waterways had been downgraded and 11 per cent. upgraded, leaving us with a 4 per cent. deterioration. In Wales, there was a 17 per cent. deterioration.
In 1989–90, there were almost 27,000 pollution incidents, of which over 3,000 were serious, but it is interesting to note that there were only 309 successful prosecutions and that often these prosecutions resulted in fines which can only be described as minimal. In the Welsh Water area, for example, there were 17 prosecutions which resulted in fines amounting to £19,000, when the companies being fined had pre-tax profits of over £100 million.
A Friends of the Earth survey of the quality of Welsh beaches showed that 20 or 30 popular Welsh beaches contravened the EC's freshwater fisheries directive, and 10 of the 30 broke the EC's dangerous substances directive, mainly because of the cadmium levels present in the inland waterways.
On sewage treatment works, while it is true that the position has improved, there have nevertheless been many instances—hundreds—where the sewage treatment works have failed to meet even the relaxed standards allowed when the Government privatised the industry.
There are here important public health issues. To their credit, the Government continue to sponsor research into the public health effects of the pollution of our popular bathing beaches. There was the Blackpool study carried out by Lancaster university, which showed clearly that children were three times more likely to suffer from vomiting and five and a half times more likely to contract diarrhoea if they went in the water than if they remained on the beach. A study in Ramsgate showed a small increase in the reporting of gastrointestinal and diarrhoeal symptoms in bathers compared with non-bathers, at a beach which did not meet EC standards, whereas at Langland bay in Swansea, a beach which did meet the standards, no increase in gastrointestinal and diarrhoeal symptoms were reported.
The Government are therefore continuing the research. and I am pleased about that, but customers have the right to know whether the beaches in their area meet these


standards. Again, I should have thought that the Government would want that information to be publicly available to the water companies' customers.
The Minister said earlier and in Committee that we were expecting too much of the director general. As other bodies, such as the National Rivers Authority, made it their business to report on river and beach water quality, and the drinking water inspectorate reports on tap water standards, he said that there was no need for that information to be brought together and provided to customers.
I am pleased to be able to say that the Water Services Association does not believe in that philosophy. In my post this morning—and I expect in the post of most hon. Members—was a fat book on all aspects of water quality—tap water, river water and beach water. If it can produce that, why cannot the director be given the duty of ensuring that customers have direct access to such information and do not have to travel up to 70 miles, as is the case for some customers in Wales, if they want to get to one of the offices where Welsh Water's information on water quality is available.
I hope that the Government, in the name of the citizens charter, are prepared to accept that customers have the right to know what is in the water that they drink and what is in the waters of our rivers, inland waterways and beaches, which may harm public health. I hope that the Government will be prepared to accept the amendments.

Mr. Simon Hughes: I shall speak briefly in support of amendment No. 6 and the others in the group. It is consistent with the policy behind the Bill that the public should be better informed after this legislation has been passed about services previously provided by either public or quasi-public utilities, as well as about other services.
As hon. Members who have been following the Bill will know, part I provides that information should be made available about water supply and levels of performance. That is right. People want to know about profitability, investment and the rest. However, one of the best tests of performance is quality.
Yesterday, the Secretary of State made it clear that, if we are to achieve good water quality, bills will have to increase by 50 per cent. in a relatively short time. That is a significant increase, but water is not a cheap service and I am not saying that it should be. I am one of those people who accept that, to get the investment needed if the water industry is to produce the best quality water, additional capital will have to come in and the public will have to pay for that service.
People naively think that the water industry is simple, but it is not. There is a lot of work between the heavens and the tap to ensure that people have no cause for complaint.
I hope that the Under-Secretary of State will be sympathetic to the idea that the information is exactly the sort that could be well used and well distributed. The amendment seems to be straightforward, especially when judged by the tests already established.
The European Community has established standards, and it is a collective sadness that we in Britain do not achieve them. Targets on drinking water quality were set for us to meet by 1985; we have failed to comply with them. As regards drinking water quality, we are the most

persistent offender in matters pursued by the European Commission and taken through the legislative process. There is still a long way to go.
A few weeks ago, I and my colleagues produced a report. I do not know whether the Under-Secretary saw it. It was called, "The Water We Drink." Based on the only figures produced by the inspectorate last year, by doing a simple mathematical multiplication, taking each water zone and the levels of excess chemicals or materials in the water in it—for example, lead or nitrates—we worked out the number of people who were potentially affected in all those zones by pollution in water. It amounted to more than 10 million users.
One cannot say that those figures were accurate in detail. They cannot be. One would have to study each zone. The water companies have to record where there is a breach on a certain component of the water in a zone. Therefore, one can only establish how many zones there are in a water authority area, how many people live in each zone and thus how many people are potentially affected.
The water industry was resistant to and critical of that form of calculation. No doubt I shall discuss that with the industry at my next meeting and I am happy to do so. None the less it is a valid argument that, judging from the drinking water inspectorate's evidence and report, and from the water industry's own methodology, many people in this country are at risk because they are drinking water which, when tested, shows a higher incidence of harmful components than is allowed in legislation agreed by us in the European Community.
The water authorities' methodology for testing water can be disputed. Some of us believe that they do not test sufficiently comprehensively to ensure that quality characteristics are adequately presented. We can debate that in the context of the water industry, but the simple proposition in the amendment is that, when one bills customers, one should tell them how good the quality of their water is.
There is no doubt that the quality of air and water is increasingly of concern to the public throughout the country. That is a characteristic of an advanced society. We expect better quality air and water now than we did 30, 50 or 100 years ago. We have the technology to quantify and judge quality and we are able to tell the customer. If we believe in open government and in the citizens charter, we must accept that citizens need information. Citizens should be the arbiters of the performance of public services, whether in public or private hands, and of the monopoly suppliers. Often water can be supplied only by a monopoly supplier, even though in the private sector.
I support the amendments in the group. Such information should be included on bills. Although the usual formula will probably be used and the Under-Secretary will probably say that there is some technical flaw in drafting the amendment so that he cannot accept the amendment tonight, I hope that he will accept the principle behind it, and that before the Bill goes on to the statute book, we can ensure that the public can find out what is going on—from information put through their letter boxes, rather than having to go to the library or to the offices of the water companies.
Recently an interesting experiment was carried out when some journalists went with the drinking water inspectorate to Severn-Trent water authority to find out what processes were carried out. One is allowed to go and demand certain information and look up the records.I


think that I am right in saying that they found—irrespective of the water quality result—that the public are not availing themselves of the right to go and look for the information. That is not surprising when the place where one might have to go may be miles from where one lives.
I send my water account from south London to Swindon because that is where the Thames Water billing office happens to be. I have never inquired whether I would have to go to Swindon to discover facts and figures about the quality of Thames water. If so, I would rarely make that journey, unless I could get off at that station on my way to somewhere else. It would be much simpler for the public to be given the information through their letter boxes by the supplier than for them to go hunting for it. I hope that the Minister will be positive and that we can make this progressive, though modest, Bill better as a result.

Mr. Baldry: We had a fair concession this evening from the hon. Member for Bridgend (Mr. Griffiths). We will have to look with care at its exact formulation in Hansard, but I think that I heard him agree that we in Britain probably have the best quality water in Europe. I think that that is what I heard him say, but I shall wish to check it in Hansard tomorrow. If he did say so, that would be an honourable statement on his part. The hon. Member for Southwark and Bermondsey (Mr. Hughes) was wrong in asserting that Britain is among the worst offenders within the European Community. It is among the top four countries in compliance with European Community directives.
9 pm
Unfortunately, the hon. Member for Bridgend spoiled a fair concession by repeating the litany of disaster that we heard in Committee. He managed to condense it today into 27 minutes; I think that it took an hour and a half in Committee, when he went through everything, including blue-green algae, which he did not mention today.
If hon. Members keep talking down the industry, it causes people to be apprehensive about drinking tap water which has to go through 57 tests, and causes them to drink more mineral water which they have to buy in supermarkets. The irony is that that product has to go through fewer tests.
I hope that we can all agree that the drinking water inspectorate undertakes a rigorous number of tests. In 1990, there were 3·3 million tests, 99 per cent. of which were within the legal standards.

Mr. Simon Hughes: The Minister has touched on two points which perhaps he can amplify. First, does he accept that the drinking water inspectorate is insufficiently staffed to do its job properly? I think that it has 19 staff who go once a year to each water authority. Secondly, the Minister made the valid point that there is far less regulation of the mineral water industry than of tap water. Does he accept that the Government should consider that, and that the customer is entitled to the same control of bottled water, which is often grandiosely described, as of tap water, as was amply demonstrated by a recent television programme?

Mr. Baldry: On the first point, the drinking water inspectorate carried out 33 million tests during 1990.

Mr. Win Griffiths: We need clarification on that point. It is not the inspectorate which carries out the tests, but the water companies themselves. A very small number of those tests are checked by the inspectorate.

Mr. Baldry: Of the 3·3 million tests carried out on drinking water during 1990, 99 per cent. were within the legal standards. The drinking water inspectorate undertakes an exercise which ensures that those tests are carried out properly and fully. A total of 3·3 million tests seems to be a substantial number. Of course, the drinking water inspectorate is a good regulatory authority which we have introduced, just as we established the National Rivers Authority and the Director General of Water Services.
The inspectorate is adequately staffed to carry out its functions. Its first year report is testimony to its ability to discharge its responsibilities. The chief inspector concluded that water supplied to consumers is of a high quality, and is often of an exceptionally high quality. I think that is evidenced by the facts.
As to water sold in shops, consumers must draw their own conclusions. My point is that it is ironic that, by talking down the quality of our drinking water, some Opposition Members are scaring people into drinking water which may not have been tested to such rigorous standards.
Amendments Nos. 6 and 10 show that there is misunderstanding about the involvement of the various regulators in the industry. We may have so many regulators that it is difficult for the Opposition to keep up with them in their determination that the interests of consumers and the public are protected.
The director general does not have a direct interest in the quality of water supplied, though he obtains information on remedial action that undertakers have in place. Should he become aware of anything not already being pursued by the National Rivers Authority or the drinking water inspectorate, he would bring it to their attention. It is appropriate for the National Rivers Authority and the drinking water inspectorate to collect and publish information, as they have the overall picture. So amendments Nos. 6 and 10 would duplicate work already being done quickly and properly by other regulators.
As for the remaining amendments, the requirement for water undertakers to provide information on water quality would increase the costs of administering the billing system, but would not make available any new information to consumers. Water undertakers are already required by the water quality regulations to maintain a record of drinking water quality, which includes details of all water quality samples taken in accordance with the regulations.
They are also required to inform each customer at least once a year that records of water quality may be inspected by the public free of charge, giving the address, telephone number and hours of opening of at least one of the offices at which such inspection may be made. That information is provided with each customer's water bill. So it would be burdensome to require sewerage undertakers to provide information on sewage discharges. Likewise, the National Rivers Authority is responsible for setting standards on discharges from sewerage works in line with European Community standards, where appropriate, and enforcing compliance with those standards.
Under the Act, the Government have made available to customers far more information about water quality than ever before. One of the central tenets of everything that we have done is that there should be the maximum openness, with the maximum information being made available to consumers on environmental matters. I believe that the present arrangements are sufficient to ensure that consumers are properly informed about the quality of their water and of sewage discharges. The amendments would simply add to the costs—which, in due course, would have to be reflected in bills to consumers—without giving consumers any extra information or advice.

Mr. Win Griffiths: I am disappointed with the Under-Secretary's reply, since we are asking simply for a logical conclusion to everything about which the Government are trumpeting on the availability of information. Like all hon. Members, the Minister knows that probably fewer than 1 per cent. of customers would be likely to visit water company offices to check the details for themselves. Like him, I do not have an estimate of the cost of our proposal, but I am sure that it would not be prohibitive as part of water company costs. Indeed, I believe it to be a cost that the consumer would be prepared to pay.
Information is available because, generally speaking, the press covers pollution incidents when they occur. The Minister must accept that hardly a week goes by without a serious incident being reported. There has been evidence that water companies have tried to get away with it in the past. The Camelford incident was the most notorious in pre-privatisation days, but, even post-privatisation, companies have faced the dilemma of whether an incident is serious enough to warrant the issue of a warning to customers, and in one incident in north-west London, when the company decided belatedly to warn consumers to boil their water, there is evidence that some people suffered ill health because they drank water before the warning was issued.

Mr. Baldry: The hon. Gentleman will acknowledge that putting information on customers' bills would not deal with the type of incident to which he has just referred. Whether a water company should advise consumers about an incident as it occurs may or may not require to be done immediately. But they will need advice, if at all, before the next quarterly bill is issued.

Mr. Win Griffiths: I do not dispute that. I am simply pointing out that water companies have not always been anxious that their customers should know about these things. If, once a year, there were enclosed with the bill a note giving details of water quality and of the standard of the sewerage service, it could do no harm.

Question put and negatived.

Clause 25

INFORMATION TO BE GIVEN TO CUSTOMERS ABOUT OVERALL PERFORMANCE

Amendment proposed: No. 7, in page 21, line 16, at end insert—
'(2) Without prejudice to the generality of subsection (1) above, each water undertaker shall include on each annual bill issued to customers a statement of whether drinking water

supplied by the undertaker to the customer concerned has on every day during the previous twelve months fulfilled quality standards presented by or on behalf of the European Community and in force on the day concerned.

(3) Where on any day to which subsection (2) above is applicable such quality standards as are therin referred to have not been fulfilled, the undertaker shall include in the statement made under that subsection details of—

(a) the dates on which the standards were not fulfilled;
(b) the substances and amounts of such substances in respect of which the standards were not fulfilled;
(c) the principal health effects of the substances referred to in paragraph (b) above;
(d) the reasons which in the view of the undertaker caused the failure to fulfil standards; and
(e) the steps which it proposes to take to improve drinking water quality in the area concerned'.—[Mr. Win Griffiths.]

Question put, That the amendment be made:—

The House divided: Ayes 36, Noes 138.

Division No. 41]
[9.10 pm


AYES


Alton, David
Lewis, Terry


Barnes, Harry (Derbyshire NE)
Livsey, Richard


Campbell, Menzies (Fife NE)
McAvoy, Thomas


Carlile, Alex (Mont'g)
Michie, Bill (Sheffield Heeley)


Carr, Michael
Morgan, Rhodri


Cook, Frank (Stockton N)
Nellist, Dave


Cox, Tom
Powell, Ray (Ogmore)


Cryer, Bob
Short, Clare


Dixon, Don
Skinner, Dennis


Ewing, Mrs Margaret (Moray)
Spearing, Nigel


Fisher, Mark
Stephen, Nicol


Foster, Derek
Thompson, Jack (Wansbeck)


George, Bruce
Vaz, Keith


Gordon, Mildred
Wallace, James


Griffiths, Nigel (Edinburgh S)
Watson, Mike (Glasgow, C)


Griffiths, Win (Bridgend)
Wise, Mrs Audrey


Hain, Peter



Henderson, Doug
Tellers for the Ayes:


Hughes, Simon (Southwark)
Mr. Frank Haynes and


Kennedy, Charles
Mr. Robert Wareing.


NOES


Baker, Nicholas (Dorset N)
Evans, David (Welwyn Hatf'd)


Baldry, Tony
Fallon, Michael


Bellingham, Henry
Farr, Sir John


Bevan, David Gilroy
Favell, Tony


Blaker, Rt Hon Sir Peter
Fenner, Dame Peggy


Bottomley, Peter
Fishburn, John Dudley


Bowis, John
Forth, Eric


Brandon-Bravo, Martin
Fox, Sir Marcus


Brown, Michael (Brigg &amp; Cl't's)
Freeman, Roger


Browne, John (Winchester)
French, Douglas


Bruce, Ian (Dorset South)
Gale, Roger


Burns, Simon
Goodlad, Rt Hon Alastair


Burt, Alistair
Greenway, John (Ryedale)


Butterfill, John
Gregory, Conal


Carlisle, John, (Luton N)
Griffiths, Peter (Portsmouth N)


Carrington, Matthew
Ground, Patrick


Channon, Rt Hon Paul
Hague, William


Chapman, Sydney
Hamilton, Neil (Tatton)


Chope, Christopher
Hargreaves, Ken (Hyndburn)


Clark, Rt Hon Sir William
Harris, David


Clarke, Rt Hon K. (Rushcliffe)
Hawkins, Christopher


Conway, Derek
Hayes, Jerry


Coombs, Anthony (Wyre F'rest)
Hayhoe, Rt Hon Sir Barney


Coombs, Simon (Swindon)
Heathcoat-Amory, David


Cope, Rt Hon Sir John
Hordern, Sir Peter


Cormack, Patrick
Howarth, G. (Cannock &amp; B'wd)


Couchman, James
Hughes, Robert G. (Harrow W)


Cran, James
Hunt, Sir John (Ravensbourne)


Davies, Q. (Stamf'd &amp; Spald'g)
Hunter, Andrew


Davis, David (Boothferry)
Irvine, Michael


Dover, Den
Jackson, Robert


Dunn, Bob
Janman, Tim


Durant, Sir Anthony
Johnson Smith, Sir Geoffrey


Dykes, Hugh
Kilfedder, James






King, Roger (B'ham N'thfield)
Powell, William (Corby)


King, Rt Hon Tom (Bridgwater)
Raison, Rt Hon Sir Timothy


Kirkhope, Timothy
Rathbone, Tim


Knapman, Roger
Redwood, John


Knight, Greg (Derby North)
Shaw, David (Dover)


Knight, Dame Jill (Edgbaston)
Shaw, Sir Michael (Scarb')


Lee, John (Pendle)
Shelton, Sir William


Lightbown, David
Shepherd, Colin (Hereford)


Lord, Michael
Sims, Roger


Luce, Rt Hon Sir Richard
Skeet, Sir Trevor


MacGregor, Rt Hon John
Smith, Tim (Beaconsfield)


McLoughlin, Patrick
Speller, Tony


McNair-Wilson, Sir Michael
Spicer, Sir Jim (Dorset W)


McNair-Wilson, Sir Patrick
Stanley, Rt Hon Sir John


Malins, Humfrey
Steen, Anthony


Mans, Keith
Stern, Michael


Marlow, Tony
Stevens, Lewis


Marshall, Sir Michael (Arundel)
Stewart, Andy (Sherwood)


Martin, David (Portsmouth S)
Sumberg, David


Maxwell-Hyslop, Sir Robin
Taylor, Ian (Esher)


Mayhew, Rt Hon Sir Patrick
Taylor, John M (Solihull)


Miller, Sir Hal
Thompson, Patrick (Norwich N)


Mills, Iain
Twinn, Dr Ian


Mitchell, Andrew (Gedling)
Waller, Gary


Moate, Roger
Ward, John


Moss, Malcolm
Wardle, Charles (Bexhill)


Moynihan, Hon Colin
Warren, Kenneth


Nelson, Anthony
Watts, John


Neubert, Sir Michael
Wheeler, Sir John


Nicholson, David (Taunton)
Widdecombe, Ann


Norris, Steve
Winterton, Nicholas


Onslow, Rt Hon Cranley
Wood, Timothy


Page, Richard
Young, Sir George (Acton)


Paice, James



Pattie, Rt Hon Sir Geoffrey
Tellers for the Noes:


Porter, Barry (Wirral S)
Mr. Tom Sackville and


Porter, David (Waveney)
Mr. Tim Boshell.

Question accordingly negatived.

Clause 31

REFERENCE OF CERTAIN DISPUTES TO THE DIRECTOR

Amendments made: No. 46, in page 26, line 4, leave out subsection (4).

No. 16, in page 26, line 23, leave out 'satisfied' and insert 'complied with'

No. 17, in page 26, line 30, leave out 'satisfied' and insert 'complied with'.

No. 18, in page 26, line 45, leave out '(3)' and insert '(4)'.

No. 19, in page 27, line I, leave out `(3A)' and insert `(4A)'.

No. 20, in page 27, line 4, leave out 'or'.

No. 21, in page 27, line 6, at end insert
'or
(c) whether any excess is repayable, or any expenses are recoverable, by the undertaker under subsection (4) above, or the amounts of any such excess or expenses,'.—[Mr. Redwood.]

Clause 32

BILLING DISPUTES

Amendments made: No. 53, in page 27, line 36, at end insert—
`by the carrying out of.

No. 22, in page 28, line 11, at end insert—

`( ) Except in such circumstances (if any) as may be prescribed—
(a) the Director or an arbitrator appointed by him shall not determine any billing dispute which is the subject of proceedings before, or with respect to which judgment has been given by, any court; and

(b) neither party to any billing dispute which has been referred to the Director for determination in accordance with regulations under this section shall commence proceedings before any court in respect of that dispute pending its determination in accordance with the regulations.

( ) No relevant undertaker may commence proceedings before any court in respect of any charge in connection with the supply of water for domestic purposes or (as the case may be) the provision of sewerage services other than by the carrying out of trade effluent functions unless, not less than 28 days before doing so, the customer concerned was informed by it, in such form and manner as may be prescribed, of—

(a) its intention to commence proceedings;
(b) the customer's rights by virtue of this section; and
(c) such other matters (if any) as may be prescribed.'.—[Mr. Redwood.]

Clause 33

THE 25,000 THERM LIMITS

Amendment made: No. 23, in page 28, line 38, leave out from 'substituting' to end of line 40 and insert
(a) where the limit is for the time being expressed by reference to a number of therms—

(i) such lower number of therms as he considers appropriate; or
(ii) such lower limit, expressed by reference to a number of kilowatt hours, as he considers appropriate; or
(b) where the limit is for the time being expressed by reference to a number of kilowatt hours, such lower number of kilowatt hours as he considers appropriate.'—[Mr. Redwood.]

Clause 35

INSET APPOINTMENTS

Amendments made: No. 24, in page 29, line 29 [Clause 35], leave out

'In section 36(3) of the Water Industry Act 1991' and insert—

'—(1) In section 7 of the Water Industry Act 1991 (continuity of appointments, replacement appointments etc.), in subsection (4), for "company; or", at the end of paragraph (b) there shall be substituted—
company;
(bb) the appointment or variation relates only to parts of that area and the conditions mentioned in subsection (5) below are satisfied in relation to each of the premises in those parts which are served by that company; or".

(2) In section 7 of the Act of 1991 the following subsections shall be added at the end—
(5) The conditions are that—

(a) the premises are, or are likely to be, supplied with not less than 250 megalitres of water in any period of twelve months; and
(b) the person who is the customer in relation to the premises consents in writing to the appointment or variation.

(6) The Secretary of State may, after consulting the Director, make regulations amending subsection (5)(a) above by substituting for the quantity of water for the time being specified there such smaller quantity as he considers appropriate."

(3) In section 8 of the Act of 1991 (procedure with respect to appointments and variations) the following subsection shall be added at the end—

"(7) The Secretary of State may by regulations impose such additional procedural requirements as he considers appropriate for any case where the conditions mentioned in section

7(5) above are required to be satisfied in relation to an application for an appointment or variation replacing a company as a relevant undertaker."

(4) In section 9 of the Act of 1991 (duties affecting making of appointments and variations), in subsection (3), after "(4)(b)" insert "or (bb)".

(5) In section 36(3) of the Act of 1991'. No. 47, in page 29, line 40, at end insert—

'( ) In section 158 of the Act of 1991 (powers to lay pipes), the following subsections shall be added at the end—

"(8) Subsections (9) and (10) below apply where—

(a) an appointment or variation has been made under section 7 above replacing a company as a relevant undertaker,
(b) the appointment or variation relates only to parts of the area to which the company's appointment as relevant undertaker related, and
(c) the conditions mentioned in subsection (5) of that section were required to be satisfied in relation to each of the premises in those parts served by that company.

(9) Where the company which has replaced the relevant undertaker has done so as water undertaker, in the application of this section and section 159 below in relation to that company any pipe supplying, or intended to supply, any of the premises referred to in subsection (8)(c) above with a supply of water which exceeds, or is likely to exceed, 250 megalitres of water in any period of twelve months shall, for the purposes of subsection (7) above, be deemed to be a water main.

(10) Where the Secretary of State makes regulations under section 7(6) above amending section 7(5)(a) above he shall by regulations make the corresponding amendment in subsection (9) above.

(11) Where the company which has replaced the relevant undertaker has done so as sewerage undertaker, in the application of this section and section 159 below in relation to that company any pipe draining, or intended to drain, any of those premises shall, for the purposes of subsection (7) above, be deemed to be a sewer.".'.—[ Mr. Redwood.]

Clause 36

CONNECTIONS WITH WATER MAINS AND COMMUNICATIONS WITH SEWERS

Amendments made: No. 25, in page 29, line 41, leave out from '1991' to end of line 12 on page 30 and insert—
'(which imposes on a water undertaker a duty to make a connection with one of its water mains where the premises for which a supply of water is required are in the undertaker's area), the words "in the undertaker's area" shall cease to have effect.'.

No. 26, in page 30, line 13, leave out from '1991', to end of line 31 and insert—
'(which gives the owner or occupier of any premises in the area of a sewerage undertaker a right to have his drains or sewer communicate with the public sewers of that undertaker), the following subsection shall be substituted for subsection (1)—

"(1) Subject to the provisions of this section—

(a) the owner or occupier of any premises, or
(b) the owner of any private sewer which drains premises,
shall be entitled to have his drains or sewer communicate with the public sewer of any sewerage undertaker and thereby to discharge foul water and surface water from those premises or that private sewer.".'.—[ Mr. Redwood.]

Clause 37

BULK SUPPLIES OF WATER

Amendments made: No. 27, in page 30, line 32, leave out first 'section' and insert 'sections'.

No. 28, in page 30, line 37, leave out 'this Part' and insert
'securing the efficient use of water resources, or the efficient supply of water,'.

No. 31, in page 31, line 20, leave out from 'section' to 'unless' in line 21.

No. 54, in page 31, line 24, leave out from 'desirability' to end of line 29 and insert
'of-

(a) facilitating effective competition within the water supply industry;
(b) the supplier's recovering the expenses of complying with its obligations by virtue of this section and securing a reasonable return on its capital;
(c) the supplier's being able to meet its existing obligations, and likely future obligations, to supply water without having to incur unreasonable expenditure in carrying out works;
(d) not putting at risk the ability of the supplier to meet its existing obligations, or likely future obligations, to supply water.'.

No. 52, in page 31, line 29, after 'capital.', insert—
'Variation and termination of bulk supply agreements.

40A.—(1) This section applies where, on the application of any party to a bulk supply agreement—

(a) it appears to the Director that it is necessary or expedient for the purpose of securing the efficient use of water resources, or the efficient supply of water, to vary the agreement or to terminate it, and
(b) the Director is satisfied that that cannot be achieved by agreement between the parties to the agreement.

(2) The Director may by order—

(a) vary the agreement by—

(i) varying the period for which the supply of water is to he given; or
(ii) varying any of the terms or conditions on which that supply is to be given; or

(b) terminate the agreement.

(3) Before making any order under this section the Director shall consult the NRA.

(4) Where an order is made under this section the agreement concerned shall have effect subject to the provision made by the order or (as the case may be) shall cease to have effect.

(5) An order under this section may require the payment of compensation by any party to the agreement to any other party.

(6) The obligations of a water undertaker under subsection (5) above shall be enforceable under section 18 above by the Director.

(7) In exercising his functions under this section, the Director shall have regard to the expenses incurred by the supplier in complying with its obligations under the bulk supply agreement and to the desirability of—

(a) facilitating effective competition within the water supply industry;
(b) the supplier's recovering the expenses of complying with its obligations by virtue of this section and securing a reasonable return on its capital;
(c) the supplier's being able to meet its existing obligations, and likely future obligations, to supply water without having to incur unreasonable expenditure in carrying out works;
(d) not putting at risk the ability of the supplier to meet its existing obligations, or likely future obligations, to supply water.

(8) In this section—
bulk supply agreement" means an agreement between one or more water undertakers for the supply of water in bulk and includes—

(a) an order under section 40 above which is deemed to be an agreement by virtue of subsection (4) of that section; and
(b) any agreement which has been varied by order under this section; and
supplier", in relation to a bulk supply agreement, means any water undertaker which is required by the agreement to provide a bulk supply of water.'.—[Mr. Redwood.]

Clause 38

LARGE SUPPLIES OF WATER TO CUSTOMERS OUTSIDE UNDERTAKER'S AREA

Amendment made: No. 30, in page 31, line 30, leave out Clause 38.—[Mr. Redwood.]

Clause 39

AGREEMENTS WITH RESPECT TO THE DISPOSAL ETC. OF EFFLUENT FROM PREMISES OUTSIDE UNDERTAKER'S AREA

Amendment made: No. 33, in page 32, line 32, leave out Clause 39.—[ Mr. Redwood.]

Clause 40

NEW CONNECTIONS WITH PUBLIC SEWERS

Amendment made: No. 55, in page 34, line 44, leave out from 'desirability' to end of line 49 and insert—
'of—

(a) facilitating effective competition within the sewerage services industry;
(b) the existing undertaker's recovering the expenses of complying with its obligations by virtue of this section and securing a reasonable return on its capital;
(c)the existing undertaker's being able to meet its existing obligations, and likely future obligations, to provide sewerage services without having to incur unreasonable expenditure in carrying out works;
(d) not putting at risk the ability of the existing undertaker to meet its existing obligations, or likely future obligations, to provide such services.'.—[ Mr. Redwood.]

Clause 47

CORRESPONDING PROVISION FOR NORTHERN IRELAND

Amendment made: No. 35, in page 38, line 38, leave out 'and 12' and insert `to 13'.—[ Mr. Redwood.]

Clause 49

SHORT TITLE, COMMENCEMENT AND EXTENT, ETC.

Amendments made: No. 36, in page 39, line 1, leave out '(4)' and insert '(5)'.

No. 56, in page 39, line 9, after '34' insert
', 35, (The domestic supply duty), (Transitional provision with respect to replacement appointments) and 36 to'.

No. 57, in page 39, line 10, leave out 'section' and insert
'sections (Conditions for connections with water mains and for supplies of water) and'.

No. 37, in page 39, line 10, after '45;', insert—
'(cc) section 46(2) to (4);'.

No. 38, in page 39, line 14, after '47;', insert—

'(ab) subsections (1) to (4), this subsection and, so far as is necessary to give effect to paragraph (b), subsection (6);'.—[ Mr. Redwood.]

Schedule 1

MINOR AND CONSEQUENTIAL AMENDMENTS

Amendments made: No. 39, in page 40, line 26, at end insert—

'. In section 4 of the Gas Act 1986 (general duties of Secretary of State and Director), the following subsection shall be inserted after subsection (3)—
(4) Subsections (1) and (2) above do not apply in relation to the determination of disputes by the Director under or by virtue of section 14A, 15A or 33A below.".'.

No. 40, in page 40, line 27, leave out 'Gas Act' and insert 'Act of'.

No. 41, in page 41, line 38, at end insert—
'. In section 8 of the Water Industry Act 1991 (procedure with respect to appointments and variations)—

(a) in subsection (2)(a) and (4)(b) "the NRA" shall be inserted after "appointee"; and
(b) in subsection (5)(b) "the NRA and on" shall be inserted after "on".'.

No. 42, in page 41, line 40, leave out 'Water Industry Act' and insert 'Act of.

No. 43, in page 42, line 8, at end insert—
'. In section 52 of the Act of 1991 (the domestic supply duty), in subsection (3)(a) for "a water main" there shall be substituted "one of the water undertaker's water mains".'.

No. 48, in page 42, line 28, at end insert—
'. In section 98(4) of the Act of 1991 (breach of duty of sewerage undertaker to provide public sewer) for "water" there shall be substituted "sewerage".'.

No. 44, in page 42, line 29, leave out paragraphs 18 to 21—[ Mr Redwood]

Schedule 2

REPEALS

Amendment made: No. 45, in page 43, line 20, column 3, at end insert—



'In section 45(1), the words "in the undertaker's area",



In section 52(2), the words "and which are situated in the area of the undertaker".'—[ Mr. Redwood.]

Title

Amendment made: No. 49, in line 13, after 'suppliers', insert
`to make a minor correction in section 98 of the Water Industry Act 1991;'.—[ Mr. Redwood.]

Order for Third Reading read.

Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Redwood.]

Mr. Henderson: I have the impression that the House is keen to make progress quickly. I do not know whether it is wise to speak for five minutes, which might encourage others to speak, or to proceed for a little longer.
May I make one or two quick points to sum up the Opposition's view of the Bill? The Government led the country to believe that privatisation would solve all the problems of our utilities. They led them to believe that


with regard to telecommunications, gas, electricity and water. The country's experience in the past five or six years has—as the Government now admit—led them to different conclusions. They now realise that privatisation in itself does very little to change the level of service provision or the prices charged for those services by what are effectively monopoly utilities, and that the key test is the sensitivity of a utility to the needs and demands of the public.
There has been growing recognition during the Bill's progress that one of the best ways to ensure that public needs and demands are represented is through a regulator. The test of whether the Bill is effective is whether it is sufficiently tough to be able to achieve what all hon. Members have agreed is essential in relation to the provision of the utility services, whether it is tough enough to give the utilities the opportunity to develop along the correct lines for the country's needs and whether the regulation is tough enough to protect the consumer.
The Bill is an improvement on the current position, in that it covers the need to set standards of performance and to give information to consumers on the extent to which those performance standards have been met, the need to establish effective procedures for dealing with complaints, the need to examine procedures to prevent unnecessary disconnections of public utility services, the need to promote efficient use of gas and electricity and the need to guarantee water quality.
On the down side, in Committee and on Report, the Government have shown themselves to be short on positive action and many of the clauses appear more concerned with public relations than public protection. If the Government were serious about setting standards of performance in telecommunications, they would have accepted the amendments tabled in Committee and on Report which dealt with questions of telephone penetration across the country, of the balance of resources throughout the regions and of additional facilities for disabled and aged people in the provision of those services.
If the Government were serious about regulation, they would have accepted amendments relating to gas and electricity which link price regimes with performance in energy efficiency and amendments linking water prices to water quality.
As the Opposition have said during debates at all stages of the Bill, we support the need for tougher regulation and for the principle behind the Bill in that regard. We shall not deny the Bill a Third Reading, but I give notice that we shall pursue the aspects of the Bill with which we are unhappy this side of the general election and promise that we shall continue to pursue them beyond that.

Mr. Ian Bruce: I wish to ask the Minister whether he will reconsider a number of issues before the Bill goes to another place. I am a shareholder in British Telecom and in Cable and Wireless which is the owner of Mercury, and I advise the Telecommunication Managers Association, so I must declare an interest.

Mr. Bob Cryer: How much do you get?

Mr. Bruce: Would you like a cut?
I welcome the Bill and the way in which it fulfils many of the promises made in the citizens charter. However, I am concerned that it should include all customers. I should have thought that business customers were included in the requirement—or pledge—in the citizens charter that,
where elements of monopoly remain, regulation protects the consumer.
"The consumer" must mean the business consumer and the single line user. The inclusion of all customers would make it much easier for British Telecom to conform to all the requirements that will be placed on it by the regulator.
It is a little strange that BT should resist that idea, because it stressed in all the documents that it sent to Committee members that it already supplies all the statistics and levels of service that it expects to have to supply under the regulations. BT claims that, in the offer-for-sale document that the Government put out when selling their shares in BT, the additional requirements extended to multi-line users would affect profitability—but that does not add up. Indeed, BT's own briefing does not suggest that.
The very clause titles in the Bill—"Standards of performance", "Information with respect to levels of performance", "Information to be given to customers about overall performance"—show that BT cannot possibly say that it will not provide multi-line users with the same level of service as single-line users in these areas. It is foolish of BT to resist applying the same standards to everyone, because that will cost more—trying to differentiate between single and multi-line users in its statistics, for instance. I suspect that it will be a nightmare for the regulator to deal with statistical information that differentiates between single and multi-line users.
Such differentiation will also lead to a nightmare when trying to decide how to reach the standards required. The cost of reaching those standards is nil, because it is much better for shareholders if BT provides a service for 99 per cent. of the time, since it is then receiving revenue for that time. BT has already adopted a compensation code for larger users, so we might as well ensure, under this Bill, that small and large users are dealt with in the same way.
I know that my hon. Friend the Minister has asked BT whether all this will affect its profitability, but I believe that BT will be foolish if it continues to resist the idea of serving all its customers under the same set of regulations.
Telecommunications is different from other forms of monopoly because under this legislation we are setting up a real free market. In such a free market, I am sure that a self-regulating body and an ombudsman will have to be appointed by the industry itself. Given that we are establishing a statutory regulator and ombudsman for only part of the industry, Mercury, the cable operator and others who have entered the field will be at a marketing disadvantage because they will be able to claim that they are subject to regulations different from those that govern BT.
We should include all telecommunications operators in the same system. If it proves too onerous for an operator who is just starting up to reach the required market share for inclusion, perhaps such operators should be required to achieve only 5 per cent. or 10 per cent.—not 25 per cent—market share before being included.
We want a true citizens charter for all telecommunications users. Everyone should know that the Government are regulating his telephone service and what is happening


in the marketplace. We know that cellular operators are excluded already. They have one of the worst records of providing the service that they promise to their customers.
If BT decided to use service retailers to sell communications in the high street, those retailers might find themselves insulated from the Act and find that BT, like them, was not covered by it.
I am sure that my hon. Friend will recall my mentioning that we should include data transmission services in the list of relevant services in new section 27L(a). Can they be included? Why should they be excluded?
BT needs to see the light. Quality regulation is good for it and good for its customers and shareholders. The Government should think again before taking the Bill to another place, because I rather suspect that, if these points are not picked up before then, their Lordships will want to press the Government further on them.

Mr. Simon Hughes: The Bill is a step in the right direction, but it is also an example of the Government trying to tidy up their act after the dogma has bolted. They rushed into a series of Bills which, it was alleged, would open monopolies to competition, but in many cases they simply changed a state monopoly to a private monopoly. The philosophy has been entirely misconceived. It is perfectly proper to say that, as a natural resource, gas is a state asset and to allow as much competition as possible in its exploitation. We have argued for greater competition in the gas industry than the Government have ever sought to provide.
All the artificial constraints of maintaining a regulated monopoly mean that it is not in the best interests of the consumer. Greater competition would require less regulation, but that will have to wait until after the election. In the meantime it is better to have tough regulation than none at all, and the consumer must have someone who can intervene on his behalf more effectively than in the past. The best intervention is that which is facilitated by information which places the remedy in the customer's own hands.
As the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) said, the Bill has missed an opportunity by not allowing the customer to know more about the quality of services. We had a debate earlier about the quality of water. Information on that could have been supplied as part of the information on the accountability of the service. An opportunity has also been lost in telecommunications; if the hon. Member for Worsley (Mr. Lewis) speaks in this debate, I think that he will address that. The Government are still lily-livered in that respect.
The Government could have scored a few points and won some political friends. They lost the opportunity. The great grey army out there, the growing number of pensioners, saw the legislation as an opportunity to lower unfair standing charges. They also saw it as a chance to reduce the cost of the basic services on which they rely—the telephone, gas, electricity and water. If the Government had wanted to make the Bill an election winner, they would have seen that political advantage. They have lost that opportunity, and it will not come again this side of the election. Perhaps they will live to regret that. At best, the Bill is a marginal improvement. To suggest that it is in any way a radical new Tory revolution for the 1990s is far from the truth.

Mr. Lewis: My hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) and the hon. Member for Southwark and Bermondsey (Mr. Hughes) were dead right when they said that the Bill is a lost opportunity. That is certainly true in the context of telecommunications and, more specifically, in premium rate services. Six years of misery have been caused by these utilities. I have raised the matter many times and while Ministers agreed that legislation was needed, they said that there was no time for it.
The services should not operate under the present system, which is a blight on the industry. The Government have consistently wrung their hands and said that in the past the services were awful. Parliamentary time has been made for the Bill and for amendment of the 1984 legislation. Ministers have consistently related the Bill to the citizens charter. If any part of that charter could be addressed in that context, it would have to be the part that deals with choice and redress and various other such matters.
I have been sought redress for people damaged by the utilities, but over the years the Government have pushed my pleas to one side. Choice has not been considered in premium rate services. There are no more excuses for Ministers. By allowing the Bill to pass through the House unamended in respect of premium rate services, they are condoning everything that is being done by those who for the past six years have been offering pornographic "services".
These so-called services will continue. They will abate only slightly as a result of the recent rules that have been introduced by the Independent Committee for the Supervision of Telephone Information Services and by Oftel. Real opportunities have been missed by rejecting our suggestion that a supervisory statutory committee should be formed, rejecting the idea of choice to opt into these "services", rejecting the proposal that the worst of these "services" should be removed and by rejecting the simple principle of direct billing.
My hon. Friend the Member for Bradford, South (Mr. Cryer) got it right when he said yesterday that Ministers will be regarded as wearers of dirty raincoats before very long.
Since Second Reading, I have received 150 letters on pornographic telephone "services". They have been written by organisations and individuals including the Women's Institute and the soroptomists. I shall refer to one or two constituents, and the significance of them will not be lost on the Minister. From Bury, North, I received two letters from organisations and four from individuals. Two organisations and two individuals wrote from Bury, South. From Bolton, West I received letters from two organisations and 11 individuals. Two organisations and 17 individuals wrote from Bolton, North-East. From Bath, I received one letter from an organisation and one from an individual. From Oxford, West and Abingdon it was one and four. It was three and six from Stockport. One organisation wrote from Nottingham, South. It was three and one from Wallasey and one and 12 from Congleton. I hasten to say that the organisation was a Labour party branch.
The public recognise that there has been an opportunity to clean up what they regard as offensive and unnecessary "services". Blame for the continuation of the "services"


will be pinned on the Minister and his colleagues. Organisations and individuals in the many Tory marginals to which I have referred will know by the end of next week exactly who is responsible and where responsibility lies. I shall ensure that their names are added to all the complaints that I have been making. As I say, they know exactly who is responsible.

Mr. Morgan: It is always a privilege to speak from the Opposition Dispatch Box, especially towards the end of a Third Reading debate. Relative to the other opportunities that I have had to speak on such occasions, however, this is a lower grade privilege because the Bill has been extremely boring. It is one of those Bills about which it is said, "Where is the beef?" So many hon. Members, including Conservative Members, have told the Minister that the Bill is a great missed opportunity that he may, at last, have got the message. If the Bill is meant to be the beginning of a revolution in the standard of public services to embody the Prime Minister's so-called big idea of a citizens charter, it is a pretty poor start.
The Minister must realise that the public are not that interested in boring details about procedures—for example, about whether a public utility is supposed to take a maximum of two weeks or three weeks to reply to a letter of complaint. They are interested in why they are paying such a high price for a service and why the company or companies providing it are making enormous profits when they are in a protected monopoly. It is the one-sidedness of privatisation of the monopoly public utilities that has been so apparent since the process started with British Telecom in 1985 that so deeply offends ordinary people throughout the country.
The Government have created what could be called Frankenstein private monsters. They are not responsible to the general public. They are not bodies against which, through the regulator, members of the public feel that they can secure redress. If they dream up a bright profit-winning idea, even if it involves walking in the dirty waters of pornography as the 0898 service does, the Government are unable or unwilling to do anything about it, even over a six-year period. The Government believe that, if an idea will reduce the profits of a privatised company, it should not be carried out.
I am afraid that the Government do not have straight in their head the idea that the public will be determined, through a different Government, to obtain proper redress for their complaints against excessive prices or dirty little ideas such as the 0898 service, which was introduced six years ago after the privatisation of British Telecom.
This is a sad day for the final part of the Bill to be passing through the Houses of Parliament. It has been reported in the press today that gas regulation is in disarray. It involves one of the few regulators that have shown some teeth in standing up to the powers that have been conferred by the Government on privatised British Gas. That regulator, James McKinnon, was knighted on 1 January and kicked in the teeth on 15 January. The Secretary of State for Energy has allowed British Gas to appeal over the head of the regulator, to his fury, because of the difficulty in sorting out the conflict over whether freeing up the industrial market for British Gas will create

higher prices for domestic consumers. Ofgas is furious about that, but the Secretary of State for Energy has said, "Oh, that's all right. If you have problems with Ofgas, come to me and I will sort them out." That is the atmosphere in which the Government are determined to work. In the end they will have to give way to a Government who will not work in that way.
The Government's beer orders were intended also to create extra competition for drinkers, a better standard of service in pubs, more choice and lower prices. They are now in disarray and landlords are being evicted, there is less choice, and beer prices are higher.
As my hon. Friend the Member for Bridgend (Mr. Griffiths) said, when Alaric the Goth attacked the Roman empire in 410 AD, he found that it was a piece of cake to sack Rome because the use of lead piping had softened the brains and determination of the Roman establishment. As a result of the problems of lead piping and the other problems mentioned by my hon. Friend relating to the privatisation of the public utilities, the Tory empire will shortly fall and will be replaced by a proper representative Government of the British people.

Mr. Redwood: My hon. Friend the Member for Dorset, South (Mr. Bruce) spoke about British Telecom standards and service for business and other users. I am sure that those remarks will be read by British Telecom. I think that it was advice to BT, rather than to me.
My hon. Friend wanted to know about data transmission services. Some of those will be covered by the proposals in this legislation. Data sent by residential and very small businesses will normally be sent on the usual voice line. Therefore, standards set for the voice line will apply. Dedicated data circuits and private circuits, primarily used by large businesses, remain outside the scope of the Bill. They are subject to much more competitve pressure.
The main data service used by residential and small businesses is fax. That is already mentioned, and specific standards can be set for it. Integrated services data network—ISDN—which provides more than one channel of communication via the same line, can transmit voice and data simultaneously. It is still using a line that provides voice telephony, so standards set for the voice line will apply. I hope that that goes some way to meeting my hon. Friend's points.
I am glad that the hon. Member for Southwark and Bermondsey (Mr. Hughes) thinks that our legislation is a step in the right direction. I believe that it is entirely the right direction. The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) asked whether the regulatory powers are tough enough. The answer is yes, they are. The regulatory powers can and will do the job. I give the House that assurance.
There is no shortage of measures in the legislation. The new proposals on water competition were introduced following our discussion in Committee, and they go a long way to improving competition in the water industry. There is also the response to our duopoly review, and many companies are now coming forward with sizeable investment projects and are seeking licences. When those licences are granted and the investments are made,


competition will build up and we will see choice in the marketplace improving and the benefits of competition coming through.
Many of the amendments tabled by the Opposition fail to recognise the duties and regulatory powers in existing legislation and in the licences. Sometimes they even fail to recognise the powers proposed in the Bill.
I disagree with the hon. Member for Worsley (Mr. Lewis) that this is a lost opportunity on premium rate services—although I hear a rumour that one of the more questionable 0898 lines—the Labour party line—has been withdrawn. That may show that the new tougher regulation is biting. I shall give way if Opposition Members wish to deny that, but I believe that it has happened.
The hon. Member for Worsley knows that many improvements have been made to the regulatory system.

Mr. Lewis: I do not know a great deal about the Labour party 0898 line, but I know that the complaints that I have made for many years to the Minister and his predecessors have been not about Neil Kinnock but about the serious pornographic messages that I believe have contributed significantly to the crimes of violence against women that take place outside on the streets. I am convinced that the one-to-one services whereby perverts phone women at night have led to people going out and committing acts of sexual violence against women. The Minister should be taking note of those services.
I am also convinced that the 10 million abusive calls that BT now admits are made to women every year are the overspill from the 0898 numbers. The Minister should be dealing with that, not making cheap jibes about innocent telephone lines.

Mr. Redwood: The hon. Gentleman knows that hon. Members on both sides of the House share his concern about certain kinds of service. Some such services are illegal, and many are against the rules in the toughened regulation. What is needed is enforcement. I assure the hon. Gentleman that, as and when abuses are drawn to the attention of the regulator or the prosecuting authorities, the correct action will be taken, as has been happening in recent months.
I resent the implication that we do not care about those disgraceful services. We do care, and we have taken action. More action will be taken on enforcement under the rules and laws set out. If the hon. Member has more information about illegal services, he should pass it on to the proper enforcement authorities.
The hon. Member for Cardiff, West (Mr. Morgan) summed up the Opposition's position well. In Committee and on the Floor of the House, the Opposition have made a series of spending pledges with other people's money, and pledges to slash the profits of industries that need profits in order to invest.
The Opposition have made pledges on free phones and loft insulation—and only today we heard that they proposed to cut the profits of the electricity industry by 37·5 per cent.

Mr. Henderson: May I bring the Minister back to the discussion that took place in Committee? The Opposition have made absolutely no commitment to provide free

phones or to increase public expenditure on telecommunications infrastructure in any way. Our argument was that British Telecom and the other operators should be negotiating with the regulator to make sure that the necessary infrastructure commitments are met.

Mr. Redwood: Either public money will be spent, so there is a different policy among Opposition Members, or it will not—in which case they agree with our policy. If the hon. Gentleman says that all the costs have to be borne by BT, that will simply mean an even bigger reduction in BT's profits and a bigger increase in its investment programme. It is always the same with Labour Members—down with profits and up with investment, with no comment on where the money is to come from. If they believe that by cutting the salaries of two or three people at the top of the operation they can pay for all those goodies they are living in cloud cuckoo land. They are talking about investment programmes costing hundreds of millions of pounds, compared with salaries in six figures, not seven or eight figures.
The Bill does the job that it was designed to do. It will deliver the promises made in the citizens charter to extend the powers of the four regulators of the privatised utilities. It is the individual customer who is most vulnerable when competition is lacking, and the Bill concentrates on improving his position and on giving the regulator more powers to stand up for him when he has disputes with the regulated utilities. The Bill puts the customer first by giving stronger powers to the regulators of telecommunications, gas, electricity and water. It provides for the setting of guaranteed service standards and for customers to know the service that they will receive. It provides for compensation where individual performance standards are not met. Would not Opposition Members like to have thought of that idea and put it through in legislation?
The Bill ensures that there is a clear complaints procedures should things go wrong. Fair competition offers the best guarantee of good services, low prices and choice. The ever-increasing competition in telecommunications is a good example of that process at work. The Bill builds on that by introducing greater competition in gas and water supply services. The combination of greater competition and better regulation will provide the benefits that customers need. The Bill is the right Bill for the job and I commend it to the House.

Question put and agreed to.

Bill read the Third time, and passed.

STAMP DUTY (TEMPORARY PROVISIONS) BILL

Ordered,
That, notwithstanding the practice of the House as to the intervals between stages of Bills brought in upon Ways and Means Resolutions, more than one stage of the Stamp Duty (Temporary Provisions) Bill may be taken at any sitting of the House.
That, in respect of the Stamp Duty (Temporary Provisions) Bill, Notices of Amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.—[Mr. Wood.]

Orders of the Day — Child Abuse (Teachers)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wood.]

Mr. John Cartwright: I am glad to have the chance at a comparatively civilised hour to draw attention to the particular problems facing teachers dealing with allegations of child abuse. I should make it clear at the outset that I act as a parliamentary consultant to the Professional Association of Teachers and that much of what I shall say tonight will be based on the practical experience of PAT members. I should also convey the regrets of the hon. Member for Ashford (Mr. Speed) that he cannot be present this evening. He also advises PAT but is presently abroad carrying out his duties in the Council of Europe. Nevertheless, he has asked me to make it clear that he strongly supports the case that I seek to make.
In considering the problem of child abuse, we all have the same starting point. Nothing must stand in the way of the safety and well-being of our children. Any acts of ill treatment, harm or abuse must be detected quickly and properly punished. Teachers clearly have an important role in relation to child abuse. They can become personally involved in any of three ways. First, a teacher may discover evidence of non-accidental injuries or other abuse of a child at school. Secondly, a teacher may witness, or be told about, an act of child abuse by a colleague at school. Thirdly, and most seriously, a teacher may be accused of abusing a child under his or her care at school.
On the first issue, teachers are obviously in a crucial position to detect cases of abuse of children in their care. They are well placed to see the changes of behaviour that may indicate abuse, as well as to observe any physical evidence. Children see more of their teachers than any other adults, apart from their parents. Teachers are often highly respected and children will confide in them. Above all, teachers are trained to listen and to talk to children. After all, that is their job.
Nevertheless, figures provided by the National Society for the Prevention of Cruelty to Children suggest that the number of child abuse cases reported by teachers remains comparatively low. Between 1983 and 1987, schools and educational welfare officers were responsible for initiating only 12 per cent. of total registrations of child abuse cases. From 1985 to 1987, only 10 per cent. of all registered children, 14 per cent. of physically abused children and 10 per cent. of sexually abused children were initially referred by schools.
Clearly, the effective training of teachers to deal with child abuse issues is crucial. The experience of PAT, which seems to be borne out by the NSPCC, is that, while some authorities provide excellent training, others seem to do virtually nothing.
There is a particular need for teachers with special responsibility for child protection to be trained in multi-agency working and procedures. Many teachers simply do not feel integrated into local child protection networks. The demands for in-service training generated by the many needs of the Education Reform Act 1988 may well have overshadowed the need for training in child protection. There is a real concern that local management of schools will add to these pressures and that training in child protection will be given only low priority.
In 1989, the National Society for the Prevention of Cruelty to Children published a "Guide for Teachers", which said:
A child sitting in class today could be 'tomorrow's tragedy'. Teachers must be helped to recognise abuse and have the confidence to know what to do about any concerns.
Sadly, that remains as true in 1992 as when it was written in 1989.
That brings me to the next area of concern. A teacher who suspects that a colleague has acted improperly towards a pupil must not be deterred from disclosing his or her concern because of fears about the effect on employment prospects. Protection against unfair dismissal is available only to employees with two years' continuous service; anyone dismissed before then has no recourse to an industrial tribunal—

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wood.]

Mr. Cartwright: Anyone dismissed before then has no recourse to an industrial tribunal, either to claim unfair dismissal or to require the employer to provide written reasons for dismissal. The Professional Association of Teachers has produced details of a particularly disturbing case in which a teacher in the independent sector was summarily dismissed very rapidly after making serious allegations against a colleague. Despite the support of parents, of fellow teachers, of priests and even of two hon. Members, one from each side of the House, that teacher was refused a hearing before the school governors and had too short a period of service to seek the support of an industrial tribunal. That may have been an extreme and, I hope, isolated case, but it underlines the need to ensure that teachers are not deterred from voicing concerns through fear of reprisals.
I now turn to the third and what I think is the most worrying issue, the position of teachers falsely accused of abusing children in their care. PAT has drawn to my attention a number of cases of teachers whose professional and personal lives have been virtually destroyed as a result of allegations made against them by children, allegations either subsequently withdrawn or shown to have absolutely no foundation.
The comparatively limited publicity that this debate has already generated has meant that a number of other cases have been brought to me, and the factors in all those are very similar to the ones given to me by PAT.
The teachers' accounts of what happened to them make disturbing reading. In two recent cases, the first that the teachers involved knew about the accusation was when the police arrived at their homes without warning, searched the premises and took away quantities of personal possessions. That surely cannot be right. I ask the Minister to consider what impact that has on innocent people and their families.
In every case that I have examined, the police were involved at a very early stage, before any serious attempt had been made either to assess the reliability of the allegation or to give the accused teacher a chance of refuting it.
In two cases, the matter was given swift local publicity. I quote from the graphic account of the wife of a teacher who suffered a false accusation of this kind:
An article about the allegation appeared in heavy type on the front page of the local newspaper and the headline was on


the hoardings outside the newsagents. The article gave no names, to protect the child, but my husband was quickly identified. In a town twenty miles from the school the story was that he was guilty and had been sacked.
In every case the accused teacher suffered a lengthy period of suspension before being told that the allegation had been withdrawn or that no proceedings would be instituted against them. All the personal accounts that I have read convey a sense of isolation, an absence of professional support, and the sheer despair generated by this experience.
All the accounts underline how difficult it is for a teacher to return to work after such a traumatic experience. As one of them put it:
Teaching is all about trust between an adult and children. That relationship must be different now after the experience of being arrested and held in jail for 10 hours.
Nor should we overlook the impact on the wives and families of accused teachers. One teacher put it graphically:
Fortunately we have a secure relationship. Had this not been the case it could have resulted in an empty house for me to return to and a divorce eventually.
None of the teachers whose cases I have examined are seeking any special protection for teachers; nor is the Professional Association of Teachers. Clearly the safety and well-being of children must be paramount, but it is simply not acceptable that a teacher accused of something as abhorrent as abusing a child in his care should be assumed to be guilty, unless or until his or her innocence can be proved. All allegations made by children, either directly or through parents or another teacher, must be considered seriously. To do less would be a dereliction of duty.
However, we must also accept that children can distort facts. Not only are children capable of fantasising about reality in an amusing way; young minds are also capable of making serious and damaging allegations against adults. Anyone accused in that way is surely entitled to expect, at an early stage in the investigations, some basic testing of the child's evidence. For example, quick but reliable checks could be made on the basic aspects of the complaint. Details such as the date, time and place of the alleged incident ought to be checked. Such basic initial assessment should be carried out before there is any question of the police being brought in.
If, as is almost inevitable, the accused teacher has to be suspended, that ought to be confirmed in writing, with the reasons set out. There should also be a clear statement that suspension is without prejudice and does not imply any presumption of guilt.
There must be strict confidentially. That is an absolutely essential protection for all concerned. Newspaper stories can be both distressing and inflammatory. As we all know, it is all too often the case that the initial accusation is given lurid headlines, while the subsequent clearing of a teacher's good name goes totally unreported.
Teachers accused of child abuse should be offered support and counselling during what may be a distressing and lengthy period of suspension. Anyone reading the accounts of teachers who have been through that appalling experience cannot fail to be affected by their feeling of being totally abandoned and of their resulting frustration and bitterness. It should be possible for the local education

authority to arrange such support, either directly or through a specialist agency, rather than merely ignoring an employee in his or her hour of need.

Mr. Frank Cook: I have been listening carefully to the hon. Gentleman and linking what he just said to his statement earlier that 14 per cent. of referrals had come from schools. Is he suggesting that the 14 per cent. of referrals from schools were the result of alleged abuse on the part of a teacher? Surely that cannot be true. Have I misunderstood?

Mr. Cartwright: The hon. Gentleman is confusing the source of the reporting rather than the source of abuse. I was relating the fact that teachers are in a good position to see abuse that occurs in other situations. It would be a great mistake to suggest that the teacher who reports abuse is responsible for causing it. That is exceedingly unlikely.
The sort of elementary rights which I have described ought to be laid down in child protection procedures. I appreciate that the Department of Education and Science takes the view that such matters are best left to education authorities or to governing bodies. However, PAT experience has been that, all too often, there are no special arrangements locally to deal with complaints of child abuse. The procedures are all too often simply those which relate to normal staff discipline cases. They are not adequate, especially given cases in which teachers are accused of abuse and found to be innocent.
It is true that the DES has published revised guidelines about the role of the education service in child abuse cases. Those are laid down in the booklet, "Working Together Under the Children Act 1989", which was published last October. That advice does not tackle the concerns which I have been trying to outline tonight and which PAT expressed during the consultation exercise last summer. I regret that.
Teachers feel that they are in a vulnerable position on this issue. One teacher, who was subsequently cleared of all charges, was told by the detective inspector who brought him the good news: "You must change your teaching methods. It's the kind of world we live in. You have to watch your own back." If that is true, it is a sad reflection on our society. I hope that the Minister will be able to offer some hope that teachers accused of something as abhorrent as child abuse will be able to depend on the system of natural justice.
I conclude with the final comment of another teacher cleared of all allegations because it is so typical of all the sad cases that I have examined:
There was no apology, no public clearing of my name, not even any compensation for the nightmare we had lived through. According to the DES it is an unfortunate consequence that a teacher suspected of child abuse is suspended and subjected to a long wait while investigations are carried out, but if the allegation is a false one, then everything will be put right when the teacher is reinstated. I am now expected to return to teaching as if nothing had happened. But every area of my life has been tainted. A stain has been put on my character; my integrity has been questioned and that will remain with me for the rest of my life.
That strikes me as an appalling indictment of the way in which we handle an admittedly difficult problem.
If these injustices are not to be repeated, we must have clearly laid down procedures which ensure that "innocent until proved guilty" is fully honoured in practice as well as in principle.

Mr. Roger Sims: I congratulate the hon. Member for Woolwich (Mr. Cartwright) on raising the subject and for doing so very sensitively. As one with teachers in my immediate family and a close involvement with the National Society for the Prevention of Cruelty to Children, I venture to say a few words.
Alas, there are cases such as the hon. Gentleman has described where children fantasise with the distressing and sometimes tragic results that the hon. Gentleman has told us about. Clearly, every step should be taken to minimise that. Sad to say, there are still thousands of children who are abused by their parents and by relatives. Teachers have an important role to play in identifying children who appear to have been subjected to abuse—physical abuse, sexual abuse or sometimes emotional abuse which is difficult to identify—or simply children who are at risk of such abuse.
Teachers see a great deal of children. They can spot minor injury, the poorly clothed child, the underfed child, the child who seems reluctant to go home, or the child who has few friends. There are also children with learning difficulties which may have been caused by some form of abuse. I am not suggesting that learning difficulties are caused automatically by abuse, but sometimes that may be a symptom.
Is the Minister satisfied that teachers receive training in how to recognise signs of child abuse, and do they know what steps they should take in such cases? I am sure that my hon. Friend will be aware that the NSPCC provides literature, including the guide to which the hon. Member for Woolwich has referred. The NSPCC also runs training courses for teachers and others on this difficult and specialist subject.
I simply ask the Minister to urge all local education authorities to ensure that all their teachers have adequate training in how to recognise possible cases of child abuse and that they follow the correct procedures in such cases.

The Parliamentary Under-Secretary of State for Education and Science (Mr. Michael Fallon): I am grateful to the hon. Member for Woolwich (Mr. Cartwright) for affording the House the opportunity to consider the issue of child abuse. Over the last few years, the Government have taken a strong lead in improving the efforts to protect children from abuse. The relevant Departments—notably, the Home Office, the Department of Health as well as my Department—work very closely together, mirroring the co-ordination of effort at local level between the police, health, social and education services.
The "Working Together" doctrine, to which the hon. Member for Woolwich referred, embodied in published central Government guidance with that title, is widely known and respected. For my Department's part, we made very firm recommendations to the education service in 1988, at the time of Lord Justice Butler-Sloss's report on child sexual abuse in Cleveland. Our paramount concern was then, and has continued to be through various further measures since, with protecting children.
The hon. Gentleman and my hon. Friend the Member for Chislehurst (Mr. Sims) raised a number of points about training, to which I shall reply in detail in writing, because

I wish tonight to concentrate on the particular matter to which attention has been drawn, the position of teachers accused of child abuse.
Naturally, I have every sympathy for the innocent teacher who suffers personal agony and blight as a result of unjustified suspicion of having perpetrated abuse on a child, and I recognise that that can be a deeply unpleasant experience. But we must start from the position that, sadly, there have been instances where individual teachers have betrayed the trust placed in them and have committed child abuse.
Where a child makes an allegation, it must be investigated and the correct procedures followed. It is sensible in cases involving an allegation of serious misconduct for the member of staff to be suspended pending full investigation of the case. I am happy to confirm that such suspension is not, and need not be seen as, a disciplinary penalty. It is a prudent measure allowing time for a proper and dispassionate investigation of the charges that have been made.
I agree very much with the hon. Gentleman that it is in everyone's interests for allegations to be investigated without delay, and conclusions reached as soon as possible; but it may be necessary to call on the skills and expertise of a number of different agencies and individuals. In complicated cases, investigations may often—for the best of reasons—take some time. The interests of the individual teacher are best protected if there is a thorough and careful examination of all relevant aspects of the case.

Miss Emma Nicholson: rose——

Mr. Fallon: I hope that my hon. Friend will forgive me if I do not give way.
Those are matters for the employers of teachers and for the investigation agencies. It is for the employer to decide whether disciplinary action is to be taken and, if the offence is serious, for the police to decide whether a prosecution is to be brought. For maintained schools, the Education Reform Act has clarified and simplified lines of management, notably the arrangements that must be followed when a teacher is dismissed.
I agree that, when a teacher has been suspended pending an investigation—and may be wholly innocent of the charges that have been levelled—it behoves the employer to consider what support and counselling that teacher needs, and perhaps whether alternative work can be found, not involving direct contact with children, while the matter is investigated. But that is a matter for individual employers in the light of the circumstances of the case.
I also agree with the hon. Gentleman that, in cases of that kind, ill-informed press reporting is extremely regrettable and can be very damaging indeed. Careless or salacious press reports can cause untold misery. A teacher may subsequently be cleared of the charges laid, but what remains in the public mind, nationally and locally, are the original allegations and innuendos. I hope that certain newspapers will consider much more carefully the wider implication of the way in which they report these cases. If they pander to prejudice and idle gossip and smears, they can do untold damage.
The Secretary of State takes extremely seriously his particular responsibilities in relation to the protection of children in schools. Where independent schools are


concerned, under the Education Act 1944 the Secretary of State has power to serve a notice of complaint if he is satisfied that the proprietor of the school or a teacher employed there is not a proper person to be the proprietor or to be employed as a teacher at a school. He can also serve a notice of complaint if he is satisfied that the proprietor is failing in his duty to safeguard and promote the welfare of children at boarding schools.

Mr. Dennis Skinner: rose——

Mr. Fallon: I hope the hon. Gentleman will forgive me for not giving way. I have a lot to get through.
We have examined carefully the procedures for protecting children in independent schools following the Crookham Court case and some other widely publicised cases in residential schools. Much of that was in preparation for the full implementation, last October, of the Children Act 1989, but I would also wish to give credit to Ms. Esther Rantzen's programmes about Crookham Court school, which have done much to bring to everyone's attention the horrors which can be perpetrated on schoolchildren. Her campaign on behalf of children at risk of abuse influenced the amendment of the Children Act to impose a duty on proprietors of independent boarding schools to safeguard and promote the welfare of pupils.
Just before that, in April 1990, the Department's registrar of independent schools wrote to head teachers and proprietors reminding them of their statutory obligation to report dismissals or resignations of teachers on grounds of misconduct. That letter gave guidance about the arrangements for checking the possible criminal background of prospective employees and repeated the Department's strong advice that all schools should make use of the facilities.
The Education (Particulars of Independent Schools) Regulations have been amended to require proprietors of schools to report the dismissal or resignation, on grounds of misconduct, of non-teaching staff as well as teachers, so that the Department can also consider barring them. The effect of this will be to widen the net to include staff other than teachers who come into close contact with children.
The Department continues to work closely with the Department of Health to make effective the duty to safeguard and promote the welfare of pupils placed on proprietors or those responsible for running independent schools with boarders. In particular, social services department inspectors, during their inspections of schools under the new provisions of the Children Act, which came into force in October, now look for evidence that appropriate checks have been made on the appointment of new staff.
My Department is today sending all boarding schools copies of the social services inspectorate's practice guide on the implementation of the new welfare duties under the Children Act. It contains further, practical guidance on all aspects of pupils' welfare—including the prevention of child abuse. It emphasises proper training for staff in this matter, as in all other matters.

Mr. Skinner: rose——

Mr. Fallon: I am sorry, but I shall not give way.

Mr. Skinner: rose——

Mr. Speaker: Order.

Mr. Fallon: Records are also being kept to monitor the volume of inquiries from independent schools about the confidential list of barred teachers. This information, together with the records kept by the Department's teachers misconduct division, will in future give us a clearer picture of the use that independent schools make of the facilities to check new staff.
Where it comes to the notice of the Secretary of State that there is immediate concern about the welfare of pupils at an independent school, we now also consider bringing the known facts to the attention of all parents or of agencies that place pupils in the school. Those measures should help considerably in tightening up on possible child abuse in independent schools.
The Secretary of State does have a direct role to play in individual cases of misconduct by teachers, but that is different from the employer's role and comes at a later stage. His responsibility is to consider individual cases of misconduct reported to the Department and to decide in each case whether it would be appropriate to exercise his power under the Education (Teachers) Regulations 1989 to bar the person concerned from teaching and from work within schools or the youth service involving regular contact with children.
If a person is barred, his or her name is then added to the Department's list 99. That is a confidential list of people who have been barred by the Secretary of State, which is circulated to local education authorities, organisations representing independent schools, and other bodies concerned with the employment of teachers. At present, there are about 1,500 names on it.
All cases of misconduct reported to the Department are given very careful consideration. That is particularly true of cases of offences, or alleged misconduct, involving children. That is only right. Parents have a right to expect that their children will be safe when they send them to school, and the protection of children must be a paramount concern. However, I agree with the hon. Member that that concern must be balanced with the right of the teacher concerned to a fair and objective decision, taking full account of his or her representations and all relevant information about the matter.
The Department's procedures are very carefully designed to balance the need to ensure that children are protected from unsuitable persons with the need to ensure fairness for the teacher and to observe the rules of natural justice. The Department is not an investigative agency—that is the role of the police and, where appropriate, local social service departments—but where barring is a possibility, we always attempt to obtain as much information as possible about the offence, or alleged misconduct, from those agencies or from the teacher's employer.
An individual being considered for barring is entitled to submit written and oral evidence and may submit a medical report. These procedures inevitably take time, but teachers who are faced with the prospect of being barred—perhaps for many years—from their chosen profession must have a full opportunity to put their side of the case to the Secretary of State.
It is also important to recognise that the Secretary of State cannot, and does not, bar anyone without proof. Where the teacher has not, in fact, been convicted of a criminal offence the Secretary of State must be satisfied that the allegations of misconduct are substantiated. He cannot act on the basis of unsupported accusations or


suspicions. We need firm evidence to support or corroborate the allegations as a basis for action. But where there is such evidence, and where the allegations are substantiated, we do not hesitate to bar the individual concerned from teaching and from work involving regular contact with children. This is, as I think the hon. Member acknowledged, a difficult and often time-consuming business and I would like to give the House a brief glimpse of it.

Mr. Skinner: Before we get on to that point, what redress has Kay Black, who worked at an independent Catholic school in the county of Derbyshire, who made allegations about child abuse and who was sacked within six months? There were police inquiries and she has had no redress. The Department of Education has had the case; it has done nothing whatsoever to help her. We have all these glossy booklets, but Kay Black is without a job. That happened in March 1989. She still has no employment. She is in Derby city hospital now having an operation.
It is high time that the Government were prepared to do something instead of waffling on. They should do something for Kay Black who, because of the Government's own employment laws, was not able to complain of unfair dismissal as a result of making allegations about child abuse. Having made those allegations, she has finished up without a job. The Government must get something done and let us have legislation to allow people like Kay Black to get jobs.

Mr. Fallon: The hon. Member has made his point and packed a number of allegations into it.

Mr. Skinner: It is all true.

Mr. Fallon: It may well be. I shall certainly look into that matter.
Each year, we receive about 350 reports of misconduct, of which about a fifth concern offences or alleged misconduct involving children. Each is investigated as thoroughly and as fairly as possible by a small team of officials in the teachers' misconduct division. I pay a tribute to them for their dedication and commitment to what is often quite unpleasant work. As a result, in the year ended March 1991, some 54 people were barred from teaching, 41 of them for misconduct involving children.
I hope that the House will accept that no system, however conscientously and thoroughly it is applied, can

be guaranteed either to prevent misconduct or to prevent allegations from being falsely and unfairly made. Our procedures have been considerably tightened up over the last two years, partly in the light of the Children Act 1989 and partly in the light of a specific number of cases, mainly in independent schools and, indeed, mainly in boarding schools.
I fully accept the statement by the hon. Member for Woolwich that those procedures must be fair, and must be seen to be fair, to the teachers concerned. Equally—and I think that the intervention of my hon. Friend the Member for Chislehurst reminded the House of the balance to be struck in these matters—we have to put in the forefront of our minds the paramount concern in these matters, which is the protection of the child. In the way that the agencies co-operate on the ground, in the way that we liaise with the other Departments in Whitehall and in the way that we investigate these cases and apply the procedures that I have outlined, we seek to be as fair as possible to all concerned.
I can give the hon. Member for Woolwich the assurance that, during each investigation, the interests of the teacher are borne in mind. We always remember that there is a career at stake, a chosen profession at stake; and each case in which an individual is considered for barring comes for ministerial decision. I can assure him from my own experience over the last year and a half that that is not a decision that is taken lightly. It has to balance the interests of the teacher, the seriousness of the allegations, the investigation that has taken place and the interests of the child.

Mr. Dennis Skinner: A teacher who makes allegations about child abuse in an independent school such as the one to which I referred earlier is treading dangerously. I am sure that Kay Black decided to try to make it clear to the people concerned that something needed investigating. But because she worked in an 'independent school, the LEA could not intervene.
In the last minute of this debate, the Minister should state that any future legislation will cover independent schools as well as LEA schools so that people like Kay Black can get redress—

The motion having been made at Ten o'clock, and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half past Ten o'clock.